HSN vs SAC Codes for Indian Freelancers: The 2026 Guide
If you have crossed the GST registration threshold or are voluntarily registering for GST, you have likely encountered a confusing field on your invoice template: HSN/SAC Code. What does it mean?
What is an HSN Code?
HSN (Harmonized System of Nomenclature) is a globally accepted 6-digit classification system used to identify Goods. If you are selling physical products (e.g., a direct-to-consumer brand, dropshipping, or selling custom hardware), you will use an HSN code.
What is an SAC Code?
SAC (Services Accounting Code) is a system established by the Central Board of Indirect Taxes and Customs (CBIC) in India specifically to classify Services.
Rule of thumb: 99% of Indian freelancers (developers, designers, consultants, writers) provide services, not physical goods. Therefore, freelancers use SAC codes, not HSN codes. All SAC codes begin with the number 99.
Common SAC Codes for Freelancers (2026)
- 998311: Management consulting and management services.
- 998313: Information technology (IT) consulting and support services. (Best for Software Developers)
- 998314: Information technology (IT) design and development services.
- 998391: Specialty design services including interior design, fashion design, industrial design, and other specialty design services. (Best for UI/UX & Graphic Designers)
- 998361: Advertising Services. (Best for Marketers & Copywriters)
Is it mandatory to include SAC codes on invoices?
According to the latest CBIC guidelines, taxpayers with an aggregate turnover of up to ₹5 Crores in the preceding financial year are required to mention a 4-digit HSN/SAC code on B2B invoices. If your turnover exceeds ₹5 Crores, a 6-digit code is mandatory.
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