Glossary · GST & Indirect Tax
HSN vs SAC
HSN is a 6/8-digit code for goods under GST; SAC is a 6-digit code for services under GST. They are governed under the same Act but apply to different categories.
The Harmonized System of Nomenclature (HSN) and the Services Accounting Code (SAC) are the two parallel classification systems notified under GST. HSN applies to goods (every supply of tangible, movable goods) and uses 6-digit headings (with optional 8-digit national extensions) maintained by the World Customs Organization; SAC applies to services (every supply of intangible, non-goods activity) and uses 6-digit codes maintained by CBIC. Both HSN and SAC are mandatory on GST tax invoices, in GSTR-1 outward-supply tables, and in GSTR-3B summary, with turnover-based thresholds for the minimum digits disclosed. Using the wrong code triggers mismatches in 2B reconciliation and audit queries.
Examples
A cotton shirt sale is reported under HSN 6205; an advertising agency service falls under SAC 9983.