HSN Code Digit Limit: Digits Required on Invoices by Turnover

The number of digits required for your HSN code depends on your total turnover from the previous financial year. For a turnover of up to ₹5 crore, you must include at least 4 digits on invoices issued to registered (B2B) buyers. For a turnover exceeding ₹5 crore, a 6-digit HSN code is mandatory on all tax invoices, whether for B2B or B2C transactions. This requirement stems from Notification 78/2020–Central Tax, which has been in effect since April 1, 2021. Businesses with a turnover of up to ₹5 crore are exempt from including HSN codes on invoices issued to unregistered buyers. The previous 2-digit requirement is no longer applicable. The following sections cover turnover calculation, GSTR-1 reporting, and applicable exceptions.

HSN Code Turnover Limit at a Glance

The digit counts are minimums. Printing more digits is fine; printing fewer is the error. The invoice rule is in Notification 78/2020–Central Tax, and the Table 12 minimums are in the GSTN advisory on HSN reporting.

4-Digit HSN Code Turnover Limit: Who Can Stay at 4 Digits

A 4-digit code (the “heading”) is enough when your aggregate turnover in the previous financial year was ₹5 crore or less. It is required on B2B invoices. The notification’s proviso lets you skip the digits on invoices to unregistered persons, so a counter bill to a walk-in customer can go without HSN.

Example (illustrative): a trader with ₹3.8 crore turnover in FY 2025-26 prints at least 4 digits on invoices to GST-registered buyers throughout FY 2026-27.

One caution. Two products under the same 4-digit heading can sit in different GST rate slabs. If your rate depends on a deeper code, use the longer code even though 4 digits satisfy the minimum.

When Is a 6-Digit HSN Code Mandatory?

If your total turnover in the preceding financial year exceeds ₹5 crore, it is mandatory to specify a 6-digit HSN code. According to a press release from the GST Council, this rule applies to both goods (HSN) and services (SAC) listed on all invoices. Previously, the requirement was to provide 4 digits for large taxpayers and 2 digits for small taxpayers.

Since this criterion is based on the turnover of the previous year, changes to the requirement can be anticipated in advance. For instance, if your turnover reaches ₹5.6 crore in the financial year 2026-27, it will become mandatory to include a 6-digit code on every invoice issued from April 1, 2027, onwards. Therefore, ensure that you update your 'item master' well before that date-do not wait until after the first invoice has been issued.

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How to Calculate Aggregate Turnover for the HSN Rule?

'Aggregate turnover' is defined under Section 2(6) of the CGST Act. It comprises the sum of taxable supplies, exempt supplies, exports, and inter-state supplies across all entities in India that share the same PAN. It excludes GST and cess, as well as inward supplies that are subject to the reverse charge mechanism. The GST Council’s clarifications regarding 'aggregate turnover' further elaborate on this definition.

Practical Implication: Turnover is calculated on a PAN-wide basis, not per GSTIN. A seller with GST registrations in both Gujarat and Maharashtra under a single PAN must combine the figures from both states. Consequently, a specific branch-even if it records sales of only ₹50 lakh-is still subject to the threshold based on the combined (aggregate) figure.

What GSTR-1 Table 12 and E-Way Bills Expect?

Table 12 of GSTR-1 is the HSN-wise summary of outward supplies. GSTN rolled out its checks in phases: 4 or 6 digits by turnover first, then Phase 3. Per the GSTN advisory of 1 May 2025, Phase 3 applies from the May 2025 return period. Earlier advisories describe what it changed: HSN is chosen from a dropdown instead of typed, and Table 12 has separate B2B and B2C tabs, with value checks that begin in warning mode.

Two consequences follow. A code that is not in the portal list cannot be selected, and the summary is checked against your invoice-level data.

E-way bills have their own check. A NIC advisory set validation from 1 February 2024: at least 6 digits for B2B and export movements above ₹5 crore turnover, and at least 4 digits below it.

Sources differ on the minimum digits for the B2C tab of a taxpayer up to ₹5 crore. The notification’s relaxation covers invoices only, so the safest habit is to pick the dropdown code for every line and confirm the current portal behaviour with your tax advisor.

Exceptions: 8-Digit Codes and Outdated Tiers

For certain goods, an 8-digit code is required, regardless of the size of the consignment. Notification 90/2020–Central Tax lists specific chemicals for which suppliers must display an 8-digit code on their tax invoices. If you deal in chemicals, please check this list.

Customs documentation utilizes an 8-digit tariff item code. This system differs from the GST code structure, although the first 6 digits are common to both.

Be wary of outdated articles. The previous system under Notification 05/2017 (requiring no digits for turnover up to ₹1.5 crore, 2 digits up to ₹5 crore, and 4 digits above that) was replaced effective April 1, 2021. Some online sources may still display this obsolete information.

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Common HSN Digit Mistakes

• Measuring the current year’s turnover, or one GSTIN’s turnover, instead of last year’s PAN-wide figure.
• Staying on 4 digits after turnover crossed ₹5 crore.
• Dropping HSN on B2B invoices because the business is small. The relaxation covers unregistered buyers only.
• Using different codes for one product on the invoice, e-way bill and GSTR-1.
• Leaving an old invoice template that prints 4 digits while the item master holds 6.

A Simple Setup for Online Sellers

1. Confirm last year’s PAN-wide turnover and note the digit minimum for the new financial year.
2. Find each product’s code in the GST portal’s HSN search and record it per SKU.
3. Store the code once in your master product sheet and reuse it everywhere.
4. Re-check the list after crossing a turnover limit and before each 1 April.

Sellers who list in bulk can cut retyping by saving repeating product details once; Barmeto’s Auto Listing, for example, stores repeating fields. Keep your verified HSN in the same master sheet so every listing and invoice uses one code.

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