HSN vs SAC Codes: What Goes on Your Invoice

The difference is simple: HSN codes classify goods, SAC codes classify services. If you sell a product, its HSN code goes on your invoice; if you sell a service, you use a SAC code — six digits that always start with 99. Businesses that sell both put the right code against each line. For service exporters, the SAC also travels beyond the invoice: it appears in GSTR-1 summaries and in Part 2B of the monthly EDF.

Key takeaways

• HSN (Harmonised System of Nomenclature) is an international goods classification adapted for Indian GST.
• SAC (Services Accounting Code) is India's services classification under GST; all SACs start with 99.
• Each invoice line needs the code that matches what's being sold on that line.
• The number of digits you must show depends on your turnover.
• Service exporters enter the SAC in EDF Part 2B for each invoice.

Side-by-side comparison

Because HSN is international, the first six digits mean the same thing in most countries' customs systems. SAC has no customs role — services don't cross borders through ports.

How many digits you must show

The digits required on a tax invoice depend on your aggregate turnover in the previous financial year. Broadly, businesses above ₹5 crore show six digits, while smaller businesses can show fewer on B2B invoices. The rules have been revised more than once, so confirm the current requirement with your CA.

For services, most exporters simply use the full six-digit SAC on every invoice regardless of turnover. It removes guesswork and matches what you'll enter in the EDF.

Reading a SAC code

SAC codes are built in layers. Take 998314:

Once you see the structure, it's easier to spot a wrong code: a software firm using a 9985 code (support services) for development work, for instance, has jumped to a different family.

Common SAC codes for service exporters

These are summaries; confirm exact descriptions and fit with your CA. The SAC code finder searches by keyword, and our guide to the SAC code for software development compares the IT codes in depth.

Mixed invoices: goods and services together

Some businesses sell both — a firm supplying hardware plus installation, or a design studio selling printed materials plus design work. Put each item on its own line with its own code:

Whether the whole bundle is taxed as one composite supply — at the rate of its principal element — is a GST judgement. If the contract treats it as a single supply, ask your CA how to code it before issuing the invoice.

For exporters, mixed deals are trickier: physical goods sent abroad go through customs with a shipping bill, which at EDI ports serves as the EDF for goods. Services are declared on the services EDF. Separate invoices for goods and services keep the two paths clean.

Where the SAC appears for a service exporter

1. The export invoice — against each line.
2. GSTR-1 — in the export table and in the HSN/SAC-wise summary.
3. The EDF — Part 2B has a SAC code column for each invoice row.
4. Your records — your accounting software should store the SAC so these all match.

Example: Lumen Ledger LLP, a bookkeeping firm in Indore, bills a UK accountancy practice GBP 5,200 (about ₹5,70,000) in October 2026 for bookkeeping. Its invoice shows SAC 998222. The same code goes into its GSTR-1 summary and into the Part 2B row on its October EDF, due 30 November 2026. When the bank and a GST officer look at the same invoice from different systems, they see the same description.

Mistakes to avoid

• Using an HSN code for a service because your software defaulted to it.
• Picking the residual "other" code when a specific one fits.
• Changing codes month to month for the same service without a reason.
• Mismatching the invoice and the EDF — the Part 2B code should match the invoice.

This is general information, not legal or tax advice.

Frequently asked questions

What is the difference between HSN and SAC?

HSN codes classify goods and come from the international Harmonised System. SAC codes classify services under Indian GST and always begin with 99. Use HSN for products and SAC for services.

Can a service invoice have an HSN code?

It shouldn't, unless the invoice also includes goods. Each line should carry the code for what's sold on that line — HSN for goods, SAC for services.

How many digits of SAC should I show on my invoice?

It depends on your aggregate turnover in the previous year; businesses above ₹5 crore generally show six digits. Many service exporters show the full six digits anyway. Confirm the current rule with your CA.

Do I need a SAC code on the EDF?

Yes. Part 2B of the EDF has a SAC code column for each invoice row. Use the same code as on your invoice.

Where can I find the right SAC code?

Use the SAC code finder to search by keyword, check the official description, and confirm the choice with your CA, especially for bundled or unusual services.

Bottom line

HSN for goods, SAC for services — and for exporters, the SAC on the invoice should be the same one you put in the EDF. Look up the right code with the SAC code finder and build invoices that carry it with the GST invoice generator.