HSN Code in GST: Complete Guide for Small Business Traders in India (2026)
HSN codes are mandatory on GST invoices for traders and retailers. A wrong or missing HSN code can block your client's ITC claim. Here's exactly how to find the right HSN code for your products and add it to every invoice.
If you run a trading business, retail shop, manufacturing unit, or any product-based business in India, you have almost certainly seen 'HSN Code' on a GST invoice or heard about it from your CA. HSN codes are a mandatory field on GST tax invoices for businesses above ₹1.5 crore turnover — and optional but strongly recommended below that threshold. A missing or incorrect HSN code can cause your client to lose their Input Tax Credit (ITC) claim, leading to disputes and lost relationships.
What is an HSN Code?
HSN stands for Harmonized System of Nomenclature. It is an internationally standardized system for classifying traded products, developed by the World Customs Organization (WCO). India adopted HSN codes under GST to uniformly classify goods across all states. Every physical product — from food to electronics to clothing — has a specific HSN code. Services have SAC (Services Accounting Code) codes instead.
An HSN code is typically 4 to 8 digits long. The more digits, the more specific the product classification. Under GST in India, the requirement is 4-digit or 8-digit HSN depending on your turnover:
| Annual Turnover | HSN Digits Required on Invoice |
|---|---|
| Below ₹1.5 crore | Optional (but recommended) |
| ₹1.5 crore to ₹5 crore | 4-digit HSN mandatory |
| Above ₹5 crore | 8-digit HSN mandatory |
How to Find the HSN Code for Your Product
- 1Go to the GST Portal: gst.gov.in → Services → User Services → Search HSN/SAC Codes.
- 2Select 'Goods' (not 'Services') and enter the first few letters of your product name.
- 3The portal shows matching HSN codes with the full product description and applicable GST rate.
- 4Choose the code that most specifically matches your product (8-digit is most specific).
- 5Save this HSN code in your Ozydo stock catalog against each product. It will automatically appear on every invoice for that product.
- 6If you are unsure between two codes, ask your CA — incorrect HSN codes can cause ITC issues for your buyers.
Common HSN Codes for Indian Traders and Retailers
| Product | HSN Code | GST Rate |
|---|---|---|
| Rice (branded) | 10063090 | 5% |
| Wheat flour (branded) | 11010000 | 5% |
| Sugar | 17019900 | 5% |
| Edible oil (refined) | 15079000 | 5% |
| Packaged drinking water | 22011090 | 18% |
| Tea (packaged) | 09021090 | 5% |
| Coffee (packaged, not roasted) | 09011190 | 5% |
| Biscuits, bread, cakes | 19053100 | 18% |
| Soaps | 34011190 | 18% |
| Shampoo, hair products | 33051090 | 18% |
| Toothpaste | 33062090 | 18% |
| Medicines (branded) | 30049099 | 12% |
| Sanitary napkins | 96190090 | 0% |
| Cotton fabric | 52081190 | 5% |
| Readymade garments (≤₹1,000 MRP) | 62099090 | 5% |
| Readymade garments (>₹1,000 MRP) | 62099090 | 12% |
| Footwear (≤₹1,000) | 64059090 | 5% |
| Footwear (>₹1,000) | 64059090 | 12% |
| Plastic containers, bottles | 39239090 | 18% |
| Pipes (PVC/CPVC) | 39172190 | 18% |
| Iron & steel bars | 72142090 | 18% |
| Screws, nuts, bolts | 73181590 | 18% |
| Electrical wires & cables | 85443090 | 18% |
| LED bulbs | 85395000 | 12% |
| Switches, sockets | 85363090 | 18% |
| Mobile phones | 85171290 | 12% |
| Laptops, computers | 84713090 | 18% |
| Refrigerators | 84181090 | 28% |
| Air conditioners | 84151010 | 28% |
| Furniture (wooden) | 94036090 | 18% |
| Mattresses | 94049090 | 18% |
| Notebooks, exercise books | 48201090 | 12% |
| Pens (ballpoint) | 96081090 | 18% |
| Cement | 25232990 | 28% |
| Paint (ready-mix) | 32089090 | 18% |
| Tiles (ceramic/porcelain) | 69072190 | 18% |
| Bicycles | 87120090 | 12% |
| Motorcycles | 87119090 | 28% |
⚠️ Always Verify GST Rate with Your CA
GST rates are subject to notification changes by the GST Council. The rates in this table are indicative as of April 2026. Always verify the applicable rate for your specific product with your Chartered Accountant or by checking the current GST rate schedule on the GST portal.
How to Add HSN Codes to Invoices in Ozydo
In Ozydo, you can set the HSN code at the product level in your stock catalog. Once set, it automatically appears on every invoice for that product — you don't have to manually enter it each time.
- 1Go to the Stock tab in Ozydo (available on Business plan).
- 2Add or edit a product. Enter the HSN Code in the HSN Code field (4 or 8 digits).
- 3Also set the GST Rate for the product (5%, 12%, 18%, 28%).
- 4Save the product.
- 5Now, when you create an invoice and add this product, the HSN code and GST rate appear on the invoice automatically.
- 6The generated PDF invoice shows the HSN code per line item as required by GST rules.
What Happens if You Use the Wrong HSN Code?
- Your buyer may be denied ITC if the HSN code does not match their purchase records or the GSTR-2A auto-populated data.
- GST officers can issue show-cause notices for systematic misclassification — especially if it results in a lower tax rate being applied.
- If you intentionally use a lower-taxed HSN code to charge less GST, it is considered tax evasion and attracts penalty + interest.
- For export businesses, the wrong HSN code can block the refund of IGST paid on exports.
- Best practice: when in doubt, use the higher-taxed classification. An incorrect HSN that results in over-payment is easily fixed; under-payment creates a liability.
Add HSN Codes to Every Invoice — Automatically
Ozydo Business lets you set the HSN code once per product. It appears on every invoice, every time — no manual entry needed.
Start Free →Frequently Asked Questions
Is HSN code mandatory for invoices below ₹200?
Businesses below ₹1.5 crore annual turnover are not required to mention HSN codes. For businesses above ₹1.5 crore, the HSN code is mandatory on all B2B invoices regardless of value. For B2C invoices below ₹200, a simplified invoice can be issued without HSN codes even above the threshold.
Do service businesses need HSN codes?
No. Service businesses use SAC (Services Accounting Code) codes instead of HSN codes. For example, SAC 998311 for IT services, 996311 for accommodation services, 9983 for professional services. The same rules apply — optional below ₹1.5 crore, 4 or 6 digit mandatory above.
Can I use a 4-digit HSN code even if my turnover is above ₹5 crore?
No. Businesses above ₹5 crore must use 8-digit HSN codes on all invoices. Using a 4-digit code when an 8-digit is required can lead to compliance issues and ITC denials for your buyers.
What if a product has multiple possible HSN codes?
This is common — many products can fall under multiple categories. The general rule is to use the most specific HSN code that describes your product. If you are supplying a composite product (e.g., a packed gift set with multiple items), use the HSN code of the principal item or the composite supply rule. Ask your CA to determine the correct classification.
Written by the Ozydo Team
Ozydo is India's simplest free GST invoice app for small businesses and freelancers. We write practical guides on invoicing, GST, and business finance to help you get paid faster.
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