What Is an HSN Code? Complete Guide for Indian Freelancers

An HSN code is an 8-digit number that classifies physical goods under GST — but if you're a freelancer selling a service, you almost certainly need a SAC code, not an HSN code. This guide explains the difference, shows you how to find the right code, and walks through a real invoice example.

HSN vs SAC: which one applies to you

HSN (Harmonized System of Nomenclature) is an international system for classifying traded goods, adopted into India's GST framework. It's built for products — a chair, a laptop, a bag of rice.

SAC (Services Accounting Code) is India's parallel system for services. Every SAC code starts with 99, followed by four more digits that narrow down the category and sub-category.

Freelancers writing code, designing logos, consulting, editing video, or offering any other service are providing a service — so the code that belongs on their GST invoice is a SAC code. The confusion is common because most people searching for "HSN code" actually mean "the classification code I need on my invoice," and for services that's SAC.

The exception: if you also sell a physical product alongside your service (for example, a designer who ships printed merchandise), that line item on the invoice needs an HSN code while the service line keeps its SAC code.

Where SAC codes for freelancers usually fall

Most freelance and consulting work sits under SAC group 9983 — "other professional, technical, and business services." A few commonly used sub-codes:

If your work doesn't fit neatly into IT or consulting, search the GST portal's SAC list by keyword, or use the HSN/SAC code finder to match your service description directly to a code. For the broader picture of how HSN and SAC codes differ and when an invoice needs both, see HSN vs SAC code: what's the difference and how to find yours.

Is the code actually mandatory on your invoice?

Once you're GST-registered, yes. CBIC rules tie the required digit length of the code to your aggregate turnover in the preceding financial year — freelancers below a certain turnover slab can use a shorter code, larger businesses must use the full 6-digit code, and the requirement applies to both B2B and B2C invoices above the slab threshold.

If you haven't crossed the GST registration threshold (₹20 lakh aggregate turnover for services in most states, ₹10 lakh in special category states) and haven't registered voluntarily, none of this applies — you're not issuing GST invoices at all.

Worked example: adding SAC and GST to an invoice

Say you're a freelance web developer invoicing a client in Pune for a project, and you're also based in Maharashtra (intra-state supply):

• Professional fee: ₹75,000
• SAC code: 998314 (IT design and development services)
• GST rate: 18%
• CGST (9%): ₹6,750
• SGST (9%): ₹6,750
• Total invoice value: ₹88,500

If the same client were in another state (inter-state supply), you'd charge IGST at 18% (₹13,500) instead of splitting into CGST/SGST — the total stays ₹88,500, only the tax breakdown on the invoice changes.

Getting the code wrong

An incorrect SAC code doesn't usually change how much GST you owe (the rate is tied to the service itself, not the code), but it can trigger mismatches during GSTR-1 filing and invite scrutiny if your declared code doesn't match your business description on the GST registration certificate. It's worth getting right the first time rather than fixing it invoice by invoice.

Frequently asked questions

Do freelancers need an HSN code or a SAC code?

Almost always a SAC code. HSN codes classify physical goods; SAC codes classify services. A freelance writer, designer, developer, or consultant is selling a service, so SAC is the correct classification — not HSN.

Is an HSN or SAC code mandatory on every freelancer invoice?

Yes, once you're GST-registered. Every tax invoice must declare the code at the digit length required for your turnover slab, whether the invoice goes to a business (B2B) or an individual (B2C).

What SAC code should a freelance web developer or IT consultant use?

Most fall under the 9983 group (other professional, technical, and business services), commonly 998314 for IT design and development or 998313 for IT consulting. Confirm the exact 6-digit code against your specific service using the GST portal's SAC list.

Do I need a code if I'm not GST-registered?

No. HSN/SAC codes are a GST invoicing requirement. If your turnover is below the GST registration threshold and you haven't registered voluntarily, you don't issue GST invoices and don't need a code.

How many digits should my SAC code have?

It depends on your aggregate turnover in the preceding financial year — smaller businesses can use fewer digits than larger ones. Check the current CBIC notification for the exact slab before finalizing your invoice template.

Not sure of your exact code yet? Try the HSN/SAC code finder to look it up. Once you know your SAC code, the fastest way to put it on an invoice correctly every time is to have it filled in automatically — use the GST Invoice Generator, or see Dharayana plans to generate GST-compliant invoices with the right code applied by default.