To find an HSN code, identify what the product is made of and what it does, locate the matching chapter in the Customs Tariff, narrow down to the 4-digit heading and 6- or 8-digit line, then confirm the code using the GST portal's HSN search and the current CBIC rate notification. Record the code and rate in your item master.
Choosing the right HSN code is the first step in charging the right GST. Get it right and your invoices, returns and e-way bills line up neatly. Get it wrong and you may under-charge tax (with interest to pay later) or over-charge customers. This guide gives a practical, repeatable method that works for most products sold by small and mid-sized Indian businesses.
If you need the basics first, read what is HSN code.
Where are HSN codes officially listed?
There are three official places to look, and each does a different job:
| Source | What it gives you | When to use it |
|---|---|---|
| GST portal "Search HSN/SAC" | Code and description search | Quick lookup by keyword |
| GSTR-1 Table 12 "Download HSN Codes List" | The master list the portal accepts | Confirming your code will be accepted in returns |
| CBIC rate notifications (Notification 9/2025-Central/Integrated Tax (Rate), as amended) | Rate against each HSN | Confirming the GST rate |
The underlying classification is the First Schedule to the Customs Tariff Act, 1975. GST rate notifications expressly say that "chapter", "heading", "sub-heading" and "tariff item" have the meanings given in that schedule, and that its interpretation rules, section notes and chapter notes apply to GST too.
How do I find the HSN code step by step?
- Describe the product precisely. Note what it is made of (cotton, steel, plastic), what it does (cools air, stores data), and how it is sold (loose, pre-packaged and labelled, as a set).
- Identify the chapter. Chapters follow material and processing level. For example: Chapter 04 dairy, 19 cereal preparations, 30 pharmaceuticals, 52 cotton, 61 knitted apparel, 62 non-knitted apparel, 84 machinery, 85 electrical equipment.
- Read the chapter notes. Notes often exclude items you would expect to find there and send them elsewhere.
- Find the 4-digit heading. Pick the heading whose wording most specifically describes your product.
- Narrow to 6 and 8 digits. Look for the sub-heading and tariff item that match size, use or composition.
- Search the GST portal with your code and a keyword to confirm the description.
- Open the current rate notification and find the entry. Watch for conditions such as value per piece, pre-packaging, or end use.
- Record code, rate, condition and unit in your item master and note the date you checked.
Worked example: classifying three products
Product 1: Packaged namkeen sold by an Indore snack maker.
- Material and processing: a prepared, ready-to-eat savoury snack.
- Chapter 21 (miscellaneous edible preparations).
- Heading 2106, line 2106 90.
- Rate notification: Schedule I lists "2106 90 — Namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, whether or not pre-packaged and labelled" at 5% IGST.
Product 2: A smartphone sold by a Lucknow mobile shop.
- Chapter 85, heading 8517.
- Schedule II lists "8517 — All goods" at 18%.
Product 3: A ₹3,200 woollen jacket sold by a Shimla retailer.
- Not knitted, so Chapter 62 (heading 6201 for men's overcoats/jackets and similar, or 6202 for women's).
- Rate depends on sale value: Chapter 62 apparel is at 5% up to ₹2,500 per piece and 18% above.
- At ₹3,200, the jacket is taxed at 18%.
Now a small bill from the Shimla retailer to a local customer (intra-state):
| Item | HSN | Value | Rate | CGST | SGST |
|---|---|---|---|---|---|
| Woollen jacket | 6201 | ₹3,200 | 18% | ₹288 | ₹288 |
| Cotton scarf (not knitted) | 6214 | ₹600 | 5% | ₹15 | ₹15 |
| Total | ₹3,800 | ₹303 | ₹303 |
Invoice total = ₹3,800 + ₹606 = ₹4,406. The HSN plus the value condition produced two different rates in one bill. Try this kind of sum on the GST calculator.
How do I handle products that could fit more than one code?
Classification disputes usually arise in four situations:
- Sets and kits. A gift box of chocolates and a mug is classified by the item giving the set its essential character, under the general interpretation rules.
- Parts and accessories. Many chapters have a "parts" heading, but section notes may send specific parts elsewhere.
- Multi-function devices. A device with several functions is generally classified by its principal function.
- Same product, different packaging. Food rate entries often turn on "pre-packaged and labelled", a term defined by reference to the Legal Metrology Act.
When you are still unsure, the options are: ask your tax professional, look for a CBIC circular clarifying the item, or apply for an advance ruling with your state's Authority for Advance Ruling.
How do I find a SAC code for a service?
Services use SAC, not HSN. The method is the same but the source is the Scheme of Classification of Services (annexure to Notification 11/2017-Central Tax (Rate)):
- Identify the section (for example, construction, professional services, transport).
- Find the heading (such as 9954 construction or 9983 professional, technical and business services).
- Choose the six-digit service code.
- Read the matching entry in the amended Notification 11/2017-CT(Rate) for the rate.
More detail is in what is SAC code.
How should I record HSN in my billing system?
Once you have the code, make sure it is used consistently:
- Keep one item master with HSN/SAC, rate, unit and any condition (for example "≤ ₹2,500 per piece → 5%").
- Show at least 4 digits (AATO up to ₹5 crore) or 6 digits (above ₹5 crore); see HSN code digits on invoice.
- Make sure the code exists in the portal's HSN list, because from the May 2025 return period Table 12 accepts only drop-down selection.
- Use the same code on e-invoices and e-way bills.
Billing Software by Betterwork stores HSN/SAC per item and pulls it into invoices and the HSN summary automatically, so a corrected code flows into every future document.
How do I use the GST portal's HSN search?
The GST portal's search does not need a login. A typical sequence:
- Open the GST portal and go to Services > User Services > Search HSN/SAC (menu names can change slightly over time).
- Choose whether you are searching goods (HSN) or services (SAC).
- Search by code (for example, "1905") or by keyword (for example, "biscuit").
- Read the full description in the results, including the chapter and heading wording.
- Note the most specific code that matches, then go to the rate notification to find the rate.
Two cautions. First, a keyword search returns matches on words, not on legal classification, so "cream" may return dairy cream, ice cream and face cream in different chapters. Second, the search tells you the code and description; it is the rate notification that tells you the rate.
Which chapters do common small-business products fall in?
| If you sell... | Start with chapter |
|---|---|
| Milk products, ghee, paneer, honey | 04 |
| Spices, tea, coffee | 09 |
| Rice, wheat, atta | 10, 11 |
| Edible oils | 15 |
| Sugar, sweets without cocoa | 17 |
| Chocolates | 18 |
| Biscuits, cakes, pasta, cornflakes | 19 |
| Pickles, juices, jams | 20 |
| Namkeen, ready food preparations | 21 |
| Bottled water, soft drinks | 22 |
| Medicines | 30 |
| Cosmetics, toiletries | 33 |
| Soap, detergents | 34 |
| Plastic articles | 39 |
| Paper and stationery | 48 |
| Yarn and fabric | 50 to 60 |
| Clothing | 61, 62 |
| Home textiles | 63 |
| Footwear | 64 |
| Steel articles | 73 |
| Machinery, computers, appliances | 84 |
| Electrical and electronic goods | 85 |
| Furniture | 94 |
| Toys and sports goods | 95 |
Food examples are covered in depth in HSN code for food products, and gadgets in HSN code for electronics.
What should I keep on file to support my classification?
A short classification note per product protects you if the code is ever questioned. Record:
- Product description, composition and use
- Photos or a specification sheet
- The HSN chosen and the alternatives you rejected, with one line on why
- The rate notification entry and serial number you relied on
- The date checked and who checked it
How do I document my HSN decision?
Choosing a code is only half the job. If a tax officer, auditor or customer later questions it, you need to show how you reached it. A short classification note for each product family takes a few minutes and saves hours later.
- Describe the product in plain words. Write what it is made of, how it is processed, how it is packed and what it is used for.
- Record the chapter, heading and sub-heading you chose, with the exact wording of the tariff entry that matches.
- Note the headings you rejected and why. For example, "not 2106 because the product is a cereal preparation covered by 1904".
- Attach evidence. Keep the supplier's invoice, a product label or spec sheet and a photo where useful.
- Link the rate entry. Note the schedule and serial number in the current rate notification that applies to your code.
- Date and review it. Revisit the note whenever a rate notification is amended or the product changes.
Keep these notes with your item master so that anyone creating a new product line follows the same reasoning. If a classification is genuinely uncertain and the amount at stake is large, discuss it with your tax professional; GST law also provides an advance ruling mechanism for registered persons who want a binding answer on classification.
Common mistakes when finding HSN codes
- Searching by brand or trade name. The tariff describes products by material and function, not brand.
- Stopping at a keyword match. A search result that "sounds right" may sit in a chapter whose notes exclude your product.
- Ignoring the rate notification's conditions. Value per piece, packaging and end use all change rates.
- Copying codes from marketplaces or competitors. They may be wrong, or describe a slightly different product.
- Not documenting your reasoning. A short note of why you chose a code helps in audits.
- Forgetting the post-22-September-2025 structure. Most goods now fall at 5% or 18%, with 40% for specified items. See GST rates and slabs.
Key takeaways
- Classify by material, function and form, starting from the chapter and narrowing down.
- Confirm the code on the GST portal and the rate in the current CBIC notification.
- Watch for conditions that split rates within one code.
- For services, use the official SAC scheme and the amended services rate notification.
- Record your choice, the date checked and the reasoning in your item master.
This guide is general information, not tax advice. Rules last checked on 20 October 2026; confirm with your tax professional for your situation.