How many digits of the HSN code does a GST invoice need?
A GST invoice needs four digits of the HSN code when aggregate turnover in the preceding financial year is up to ₹5 crore, and six digits when that turnover is above ₹5 crore. Below ₹5 crore the four digits are mandatory on a B2B invoice and optional on a B2C invoice. The same bands apply to an SAC code for services.
What is an HSN code on a GST invoice?
HSN is the Harmonised System of Nomenclature. On a GST invoice it is the number that classifies the goods, so the rate on the rate page can be tied to a heading. A service uses a Services Accounting Code instead. The invoice fields are on the GST invoice page.
How many digits are required?
The count follows turnover in the preceding financial year, not the value of one invoice.
| Preceding year’s turnover | Digits |
|---|---|
| Up to ₹5 crore | 4, on a B2B invoice. Optional on a B2C invoice. |
| Above ₹5 crore | 6, on every invoice. |
Eight digits are used where a notification or the customs tariff requires them, including specified goods and import or export declarations. They are not the general invoice rule for a domestic sale.
Six above five crore. Turnover above ₹5 crore in the preceding year means six digits on every invoice.
Does the code set the rate?
The rate is the one the rate notification attaches to that heading. A wrong digit can put the supply in the wrong heading and on the wrong line of GSTR-1. The buyer’s credit then fails to match. The code is chosen before the invoice is issued, not corrected only in the annual return.
Where is the code looked up?
The GST portal publishes an HSN and SAC search. The description on the invoice has to match the heading that is chosen. A trade name is not a substitute for the code.
Frequently asked questions
Four questions cover two digits, services, a cash bill, and e-invoicing.
Is a two-digit HSN code enough?
No. The rule in force asks for four digits when the preceding year’s turnover is up to ₹5 crore, on a B2B invoice, and six digits when turnover is above ₹5 crore. The older two-digit step is not the current limit.
Is the same limit used for services?
Yes. A service uses an SAC code. The digit count follows the same turnover bands as the HSN on goods.
Must a small shop print the HSN on a cash bill?
When turnover is up to ₹5 crore, four digits are required on a B2B invoice. On a B2C invoice they are optional. Above ₹5 crore, six digits are required on every invoice.
Does e-invoicing change the digits?
A person who must e-invoice is already above ₹5 crore, so the invoice carries six digits. E-invoicing does not reduce the count.
Sources
The digit rule is Notification 78/2020-Central Tax. The code itself is looked up on the GST portal.