HSN and SAC codes are now mandatory in Zoho Books: what to fix
Since September 2026, Zoho Books for India requires an HSN code on taxable goods and a SAC code on taxable services before the item can be used. The check stops errors on the GST portal later, but businesses with old or imported item lists now meet it on their next invoice or bill.
1. Find the items without a code
Export your items list from Zoho Books and filter the HSN/SAC column for blanks. Include inactive items you may reactivate, and composite items or assemblies.
2. Work out the right codes
Start from codes you already use on purchase bills from your suppliers for the same goods, then check doubtful ones in the official HSN directory. Use one code per product type, so similar items carry the same code.
3. Use enough digits
GST rules set the minimum number of HSN digits on invoices by turnover: four digits for businesses with aggregate turnover up to ₹5 crore, and six digits above that. Using the longer code is never wrong.
4. Update in bulk
Fill the codes in the exported file and import it back to update the existing items, instead of editing them one by one. Check a few items afterwards to confirm the tax rate and code match.
5. Check before you file
Where else the codes matter
- E-invoices: the HSN or SAC code on each line is sent to the IRP, so a wrong code shows up on every e-invoice for that item.
- E-way bills: the code travels on the e-way bill for goods in transit.
- GSTR-1 HSN summary: the return groups your sales by code, quantity and tax rate, which is why mismatched codes are easy for the department to spot.
- Purchase side: keeping codes on purchase items helps you compare them with what suppliers report.
Common mistakes we fix
- One generic code used for every product, regardless of what it is.
- Service items given an HSN code (goods) instead of a SAC code (services).
- Codes updated on items but not on recurring invoice templates or saved estimates.
- Composite items and assemblies left without codes because they were created by import.
A one-afternoon clean-up plan
- Export items and sort by sales value, so you fix the items you invoice most first.
- Fill codes for the top items, then the rest by product group.
- Import the file back as an update and spot-check ten items.
- Open any recurring invoices and estimates and confirm they pick up the new codes.
- Run the HSN summary for the current month and compare it with the previous one.
Run the HSN summary before filing GSTR-1. Items with the same code but different tax rates usually point to a wrong code or rate on one of them.
Confirm codes and rates with your Chartered Accountant. Need help cleaning a large item list? Talk to us.