📘 CODES FOR GST ( Goods & Services Tax)
Both codes help in standardized taxation and invoicing under GST.
HSN – derived from the World Customs Organization (WCO) system.
HSN code is 6 digits. However, some countries, such as India, add extra digits for more detailed classification, making the code 8 digits long. Here is a breakdown of the HSN code structure:
6-digit HSN: The worldwide standard developed by the World Customs Organization (WCO).
First 2 digits: Chapter number.
Next 2 digits: Heading within the chapter.
Last 2 digits: Subheading within the heading.
SAC – developed by the Central Board of Indirect Taxes & Customs (CBIC) for services.
8-digit HSN: An expanded code used in some countries, including India, for more precise classification and taxation.
First 6 digits: The international HSN code.
Last 2 digits: Additional details, also known as the tariff item.
Mention of HSN or SAC on invoices is mandatory depending on turnover thresholds.
