HSN and SAC Codes: How to Find and Use Them on Invoices
HSN and SAC codes are one of the more confusing parts of GST invoicing for freelancers, mostly because it's not always obvious which one applies or whether it's mandatory for your business.
HSN vs SAC: What's the Difference
- HSN (Harmonized System of Nomenclature) - used to classify physical goods.
- SAC (Services Accounting Code) - used to classify services, which covers most freelancers: designers, developers, consultants, writers, and agencies.
Is It Mandatory on Your Invoice?
Whether you must show the HSN/SAC code - and how many digits - depends on your annual turnover. Businesses above certain turnover thresholds must show more digits of the code; smaller businesses may have relaxed requirements. Thresholds are updated periodically by the GST Council, so check the current rule for your turnover bracket before finalizing your invoice format.
How to Find Your SAC Code
- Search the official GST SAC code list for a description closest to your service (e.g., "Software development services," "Management consulting services," "Advertising services").
- Ask your accountant to confirm the code once, then reuse it consistently across future invoices for the same service line.
- If you offer multiple distinct services, you may need different SAC codes for each line item.
Why Getting This Right Matters
An incorrect or missing SAC code can cause mismatches during GST return filing and may affect your client's ability to claim input tax credit smoothly. It's a small detail with outsized downstream impact.
Add It to Your Invoice
Once you know your SAC code, add it consistently to your invoice's line item descriptions - for example, "Web Development Services (SAC 998314)". FlowInvoice's free generator gives you a flexible description field for exactly this.