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How to Classify Goods and Services Under GST and Find the Right HSN or SAC Code

Use a precise description and the GST Portal’s Search HSN Code service to identify a candidate, verify it against the actual supply, and check current reporting rules before filing.
From TheFinanceBase Team3 min to read

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For GST classification in India, goods are reported with an HSN code and services with a Service Classification Code, also commonly called a SAC code. To find a candidate, describe what you actually supply, search the GST Portal’s Search HSN Code service by description or known code, and compare the result with the supply before using it. A search suggestion is not an item-specific classification ruling.

First decide whether your supply is goods or a service

Classification starts with the nature of the supply, not simply the name used on a quote, invoice, or product listing. The GST Portal’s registration guidance directs businesses to enter an HSN code for goods or commodities in the Goods tab and a Service Classification Code in the Services tab. Other GST materials commonly call the service classification code a SAC.

For goods, write down what the product is, what it does, and its relevant material or composition. For services, describe the activity actually delivered. Include enough detail to distinguish the supply from similar offerings; a broad trade name may not do that.

How to find a candidate HSN or SAC code

  1. Describe the supply precisely. Note its function and, for a product, relevant material or composition. Describe the service activity rather than relying on a business name or package label.
  2. Open the GST Portal’s Search HSN Code service. Search using a known code or choose a description-based search. GSTN guidance says a description search can use trade, commercial, or technical descriptions and asks you to select goods or services.
  3. Review the suggested descriptions. The GST Portal registration guide illustrates description searches with “cotton” for goods and “other building” for services. Treat these as examples of how to search, not as classifications for other supplies.
  4. Compare each candidate with the actual supply. Check whether the official description fits what you supply, including its nature and function and the degree of detail in the entry. Do not select a code merely because it appears near your search term or resembles a partial product name.
  5. Verify the classification before using it. Check the current classification entry and any applicable tariff or notification material. If more than one entry appears plausible, seek qualified GST advice: a search result is a lookup aid, not an item-specific ruling.
  6. Check the reporting workflow for your filing. Registration and return reporting have their own portal fields, code-selection steps, and reporting requirements. Consult the live GST Portal instructions for the relevant return period and your circumstances.

What to know about HSN reporting in GSTR-1

GSTN’s Table 12 advisory describes a Phase 3 reporting implementation beginning with the May 2025 return period. In that advisory, the required number of digits depends on the taxpayer’s preceding-financial-year aggregate annual turnover (AATO):

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Preceding-financial-year AATO HSN reporting length described for Phase 3
Up to ₹5 crore, inclusive 4 digits
Above ₹5 crore 6 digits

The advisory also says that, in this phase, the code is selected from a dropdown rather than entered manually. It describes separate B2B and B2C tabs and a downloadable Excel list of HSN and SAC codes with descriptions. These requirements and workflow details are tied to the advisory’s stated phase and period; check current GST Portal instructions and any later amendments before filing.

The GST Portal’s GSTR-1 guidance describes HSN-wise outward-supply reporting and an HSN/SAC code list for goods and services. Use the applicable return workflow rather than assuming the registration screen and a return table work identically.

Why a lookup does not settle every classification question

A code search can narrow the options, but the right classification depends on the facts of the particular supply and the relevant classification materials. Two items with similar names may not be interchangeable for classification purposes. Compare the full descriptions with what is actually supplied, not just the search ranking or a neighboring suggestion.

No product or service is specified here, so there is no defensible exact HSN/SAC code or applicable GST rate to provide. A classification lookup alone should not be treated as confirmation of a tax rate. Check the applicable official materials for both, and get professional advice when the facts leave plausible alternatives.

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Check for changes before relying on a code

GST reporting rules and code or rate masters can be updated. IRIS IRP help documentation, powered by IRIS Business Services for GSTN, includes dated release notes documenting updates to rate and code masters. That makes it prudent to verify the live official portal and relevant notifications when registering or preparing a return, rather than relying on an old saved list or an earlier search result.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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