What is HSN code?
Harmonised System of Nomenclature code
An HSN code classifies goods for GST and trade. Tenders and bids ask for it so the buyer can identify each item and apply the right GST rate.
What is an HSN code?
HSN stands for Harmonised System of Nomenclature, an international system for classifying goods developed by the World Customs Organization. India uses it for customs and for GST, extending the international codes with further digits for finer classification.
Services are classified separately using SAC (Services Accounting Codes), so a service tender may ask for a SAC rather than an HSN code.
Why tenders ask for it
The HSN code links each quoted item to a GST rate and a clear product classification.
- To check that the GST rate a bidder applies is correct
- To compare bids on the same tax basis in the comparative statement
- To match invoices to the items in the order
- On GeM, as part of product details in listings and offers
Tips for bidders
Give the HSN code for every item in your price schedule if the tender asks for it, and use the same code on your invoices.
If you are unsure of the correct code or rate, check with your tax adviser before bidding. A wrong code can lead to a wrong GST rate, a price dispute or a query during evaluation.
Common questions
Common questions about HSN code in government tenders.
It depends on the tender. Many tenders and portals ask for it in the price schedule, and missing codes can be raised as a shortfall.
HSN codes classify goods, while SAC codes classify services. Both are used under GST.
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