Taxpex is a CA-led tax and compliance firm in India offering GST registration and return filing, income tax return (ITR) filing, company and LLP registration, accounting, payroll, TDS filing and ROC compliance for startups, freelancers and SMEs.

How much does GST registration cost with Taxpex?

GST registration with Taxpex starts at ₹999 and is typically completed in 3–7 working days once documents (PAN, Aadhaar, photo, address proof and bank details) are shared.

How long does ITR filing take?

Most individual and freelancer ITRs are prepared and e-verified within 24–48 hours of receiving Form 16, bank statements and investment proofs. Business ITRs with audit take longer.

Which ITR form should I file?

Salaried individuals with one house property usually file ITR-1, capital gains cases file ITR-2, freelancers and professionals file ITR-3 or ITR-4 under presumptive taxation, partnership firms file ITR-5 and companies file ITR-6.

Is GST return filing mandatory every month?

Yes. Regular taxpayers file GSTR-1 and GSTR-3B monthly (or quarterly under QRMP), and GSTR-9 annually. Late filing attracts ₹50 per day late fee (₹20 for nil returns) plus 18% annual interest on tax dues.

Does Taxpex serve clients outside Delhi?

Yes. Taxpex works 100% online and serves clients across India, including Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Ahmedabad, Jaipur, Kolkata, Noida and Gurugram.

Taxpex Consultancy — GST, ITR & Company Registration Services

The essentials

Everything you need to know, in one glance

What it is

The globally harmonised classification of goods (HSN) and India's classification of services (SAC) used to determine the correct GST rate, ITC eligibility and reporting.

Why it matters

Wrong classification = wrong tax rate = ITC denial to your buyer + interest + penalty during audit. Classification disputes are the second-most common cause of DRC-01 notices after ITC mismatches.

When it applies

Every time you set up a new product/service in your ERP, price a new item, negotiate an inter-state contract, or expand into a new sector.

Who it's for

Every GST-registered manufacturer, trader, service provider, e-commerce seller and exporter.

How it works

Search the Taxpex HSN/SAC Finder → confirm rate against CBIC schedule → validate with tax auditor for edge cases → freeze in item master.

Overview

HSN (Harmonized System of Nomenclature) is a global 6-8 digit classification of goods maintained by the WCO; SAC (Services Accounting Code) is India's 6-digit classification of services under GST — every SAC starts with 99. Correct classification determines the GST rate, e-invoicing applicability, e-way bill triggers and the ITC available to buyers.

This hub is the reference for classification — chapter-wise HSN, section-wise SAC, GST rate schedule from CBIC, common misclassifications, e-invoicing thresholds and the practical rules of thumb for edge cases (composite supplies, mixed supplies, bundled services).

In-depth guide

The complete playbook

01

HSN — how deep should you go?

HSN in India follows a 4/6/8-digit structure. Businesses with aggregate annual turnover (AATO) up to ₹5 crore need only report 4-digit HSN on B2B invoices; above ₹5 crore need 6-digit HSN on all B2B and B2C invoices. E-invoicing (above ₹5 Cr AATO) requires 6-digit HSN in the IRP JSON. Imports and exports demand full 8-digit HSN aligned to the Customs tariff.

Chapter-wise, the HSN schedule runs from Chapter 01 (live animals) to Chapter 98 (special categories). Most misclassifications happen at the sub-heading level — e.g., 'laptop' can be 8471 (data-processing machine) at 18% but a rugged industrial device might fall under 8517 at 18% or 8543 at 18%; the description in the buyer's PO isn't your defence during audit.

02

SAC — how services are classified

Every SAC in India starts with 99 and follows the UN CPC (Central Product Classification) structure. Section 99811-99887 covers Business Services (IT, consulting, R&D, legal, accounting, advertising, HR, security, cleaning). Section 99631-99633 covers accommodation, food and beverage services (restaurant, catering, hotel). Construction is 9954x, transport 9964-9967, financial services 9971.

IT services under 998313 attract 18% GST; software licensing under 997331 also 18%; consulting under 998311 at 18%; restaurant services at 5% (without ITC) or 18% (with ITC, for starred hotels). Get SAC classification wrong and buyers file GSTR-2B disputes — resolving these takes weeks and threatens ITC in the current month.

03

Composite vs mixed supply — the rule everyone forgets

A composite supply is when two or more taxable supplies are naturally bundled and one is the principal supply (e.g., hotel accommodation with breakfast → rate of accommodation). GST applies at the rate of the principal supply.

A mixed supply is two or more supplies made for a single price where they aren't naturally bundled (e.g., a Diwali hamper of sweets + dry fruits + chocolate). GST applies at the highest rate applicable to any of the items in the bundle. Getting this wrong on gift boxes, subscription plans and combo offers is the most common classification error in modern D2C invoicing.

Real-world scenarios

Who uses this, and how

E-commerce seller listing new SKUs

HSN + GST rate frozen in Amazon/Flipkart catalog; wrong rate = seller-account block.

SaaS company invoicing enterprise clients

998313 @ 18%, place of supply per Sec 12/13, LUT for exports.

D2C brand launching combo packs

Mixed vs composite supply analysis; highest rate applies for mixed.

Exporter

HSN 6-digit for GST + 8-digit for Customs; LUT + shipping bill match.

Restaurant chain

9963xx at 5% (no ITC) or 18% (with ITC in starred hotels).

Process

Step-by-step, from start to finish

01Initial classification
Week 1
Item master mapped to HSN/SAC + GST rate
02E-invoicing setup
As threshold crossed
6-digit HSN validation in IRP JSON
03Annual review
March
Compare against CBIC notifications for rate changes
04Audit reconciliation
Annually
GSTR-1 HSN summary vs financial ledger

Ready-to-use checklist

Everything you'll need before you start

Every SKU in item master mapped to 6-digit HSN with GST rate
Every service line mapped to 6-digit SAC
Composite vs mixed supply analysis done for bundled offerings
E-invoicing JSON validates HSN (6-digit) for AATO > ₹5 Cr
GSTR-1 HSN summary reconciles with the total taxable value
Annual review against CBIC notifications for rate changes

Common pitfalls

Mistakes that cost businesses money

Using 4-digit HSN when AATO > ₹5 Cr — invoice becomes invalid

Treating restaurant sales as 5% while operating a starred hotel (should be 18% with ITC)

Missing composite vs mixed supply — Diwali hampers taxed at lowest instead of highest

Not updating HSN when CBIC issues rate revision (e.g., textiles Jan 2022 partial rollback)

CA insights

What our CAs recommend

For every new SKU launched, force a 3-step classification: (a) chapter, (b) heading (4-digit), (c) sub-heading (6-digit). Skipping this is the #1 cause of DRC-01 rate-mismatch notices.

Save the CBIC notification number + date next to each HSN in your item master — audit officers ask for the source of the rate, not just the rate.

For composite supplies, always document the principal supply logic in an internal memo — during audit this is the difference between a benign question and a demand.

Reviewed by Taxpex Editorial Board · Independent CA review

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Frequently asked

Is HSN mandatory on GST invoices?+

Yes. Businesses with aggregate annual turnover (AATO) up to ₹5 crore report 4-digit HSN on B2B invoices; above ₹5 crore report 6-digit HSN on all B2B and B2C invoices. Non-compliance can invalidate the invoice and deny ITC to the buyer.

What is the difference between HSN and SAC?+

HSN (Harmonized System of Nomenclature) classifies goods and is aligned to the global 6-8 digit WCO system. SAC (Services Accounting Code) is India's 6-digit classification of services under GST — every SAC starts with 99.

How do I find the GST rate for my product?+

Use the Taxpex HSN/SAC Finder above — enter the product name, HSN code, or keyword; results show current GST rate with CGST/SGST split for intra-state and IGST for inter-state supply, aligned to the latest CBIC schedule.

What is a composite supply?+

A supply of two or more taxable goods/services naturally bundled together with one being the principal supply — GST applies at the rate of the principal supply. Different from mixed supply where the highest rate applies.

When do I need reverse GST?+

When a supplier gives you a GST-inclusive price and you need to break it into base + GST for invoicing or ITC reconciliation.

Do I need GST to register?+

GST is mandatory only if your turnover exceeds the GST threshold. Otherwise PAN is enough.

Does this include processing fees or GST?+

No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

Does this include processing fees or GST?+

No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

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Talk to a CA Explore HSN / SAC service

HSN & SAC codes — find rates and classification