What is an HSN Code?
HSN stands for Harmonized System of Nomenclature. It is an internationally standardized system of names and numbers developed by the World Customs Organization (WCO) to classify traded products. India adopted HSN codes under the GST regime to identify goods and determine the applicable tax rate on every GST invoice.
Every product sold in India must be assigned an HSN code, and every service must have an SAC (Services Accounting Code). These codes ensure that the correct GST rate is applied uniformly across the country. For businesses, using the right HSN code is essential for filing accurate GST returns and avoiding penalties during audits.
- HSN codes are 4 to 8 digits long and follow a hierarchical structure: Chapter (2 digits) > Heading (4 digits) > Subheading (6 digits) > Tariff item (8 digits)
- SAC codes classify services and are 6 digits long, always starting with 99
- From April 2021, HSN/SAC codes are mandatory on all GST invoices regardless of turnover for B2B transactions
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How is an HSN Code Structured?
HSN codes follow a logical, hierarchical numbering system. Understanding the structure helps you find the right code for any product. The code gets more specific as you add digits.
Chapter (2 digits) + Heading (2 digits) + Subheading (2 digits) + Tariff (2 digits)
For example, the HSN code for packaged drinking water is 2201. Here, 22 is the chapter (Beverages, spirits, and vinegar), and 01 is the heading (Waters, including mineral and aerated). The full 8-digit code 22011010 specifies "Packaged drinking water" under CBIC GST classification.
2 digits (Chapter): Broad product category, such as 09 for Coffee/Tea/Spices or 84 for Machinery
4 digits (Heading): Specific product group, such as 0901 for Coffee or 8418 for Refrigerators
6 digits (Subheading): Detailed product type, such as 090111 for Coffee (not roasted, not decaffeinated)
8 digits (Tariff item): India-specific classification for precise GST rate application
HSN Code Lookup Example
Let's say you run a restaurant and need to find the HSN code for frozen chicken that you purchase from a supplier. Here's how you would identify the correct code.
Product: Frozen chicken
Chapter: 02 (Meat and edible meat offal)
Heading: 0207 (Meat and edible offal of poultry)
Subheading: 020714 (Cuts and offal, frozen)
GST Rate: 5% (fresh/frozen meat is essential food)
On invoice: Use code 0207 (4 digits) if turnover is below Rs 5 crore, or 020714 (6 digits) if above Rs 5 crore
For restaurant services like dine-in food, you use SAC code 996331 with 5% GST (without ITC). If you are a restaurant inside a 5-star hotel with room tariff above Rs 7,500, the GST rate is 18% with ITC. This distinction matters when you generate your GST invoice.
Why are HSN Codes Important?
Using the correct HSN code on every invoice is not just a compliance requirement. It directly impacts your tax calculations, ITC claims, and audit outcomes. Here's why restaurant and food business owners need to get it right:
- Correct GST rate application: Different food products attract different GST rates. Fresh vegetables (0%) vs packaged snacks (12%) vs aerated drinks (28%) all need different HSN codes
- ITC claim validation: Your buyer can claim Input Tax Credit only if your invoice has the correct HSN code. Wrong codes lead to ITC rejection
- GST return filing accuracy: GSTR-1 requires HSN-wise summary of outward supplies. Incorrect codes cause mismatches during reconciliation
- Audit protection: GST auditors verify HSN codes against the actual products sold. Misclassification can result in penalties under Section 122 of the CGST Act
How to Use This HSN Code Finder
This free tool helps you find the correct HSN or SAC code for any product or service in seconds. It is built specifically for restaurant owners, food businesses, and small businesses that need accurate codes for GST invoicing.
- Step 1: Type your product or service name in the search box (e.g., "rice", "cooking oil", "catering service")
- Step 2: You can also search by HSN/SAC code number directly if you know the chapter or heading
- Step 3: Use the category filters to browse codes by Food, Equipment, Services, Packaging, or Supplies
- Step 4: View the matching results with HSN/SAC code, description, GST rate, and category
The database covers 200+ HSN and SAC codes commonly used by restaurants, caterers, cloud kitchens, and food businesses in India. For automated HSN code mapping on every invoice, try Petpooja Invoice.
Common HSN Codes for Restaurants in India
Restaurants deal with dozens of product categories daily, from raw ingredients to packaging materials. Each category has its own HSN code and GST rate. Here are the most commonly used chapters for restaurant businesses:
- Chapter 02 (Meat): Fresh and frozen meat (chicken, mutton, fish) at 5% GST. Processed meat products at 12%
- Chapter 07-08 (Vegetables and Fruits): Fresh vegetables and fruits are exempt (0% GST). Frozen and processed varieties attract 5-12%
- Chapter 09 (Spices): Whole spices at 5%, ground and processed spices at 5-12%. Saffron and vanilla at 5%
- Chapter 15 (Oils): Edible oils at 5% GST. Vegetable fats and hydrogenated oils at 12%
- Chapter 19-21 (Prepared Foods): Bread and bakery at 5%, pasta at 12%, ready-to-eat preparations at 12-18%
- Chapter 22 (Beverages): Drinking water at 18%, aerated drinks at 28% + 12% cess, fruit juice at 12%
- SAC 9963 (Food Services): Restaurant dine-in at 5% (no ITC), outdoor catering at 18%, event catering at 18%
For a complete breakdown of how GST applies to your specific products, use the finder tool above. Each code shows the exact applicable GST slab so you can create accurate invoices.
HSN Code Requirements by Turnover
The number of HSN digits you must mention on invoices depends on your annual aggregate turnover. The GST Council has mandated different levels of detail for different business sizes.
Turnover up to Rs 1.5 crore: 4-digit HSN code mandatory for B2B invoices. Optional for B2C
Turnover Rs 1.5 crore to Rs 5 crore: 4-digit HSN code mandatory on all invoices
Turnover above Rs 5 crore: 6-digit HSN code mandatory on all invoices
E-invoicing: 6-digit HSN codes are mandatory regardless of turnover for businesses under e-invoicing
Businesses under the GST composition scheme are not required to mention HSN codes on their bill of supply. However, it is still recommended to maintain HSN-wise records for internal tracking and future compliance if you transition to the regular scheme.