Also called Harmonized System of Nomenclature, HSN, HS code
HSN stands for Harmonized System of Nomenclature, a numbering system for goods used across the world. India uses it under GST to classify every product. The first digits give the broad chapter and later digits get more specific. Services use a similar code called SAC.
The HSN code decides the GST rate, so getting it wrong means charging the wrong tax. Invoices and the HSN summary in GSTR-1 must show it. A business with aggregate turnover up to ₹5 crore must show at least 4 digits on B2B invoices, and a larger business at least 6.
Take a packet of biscuits under chapter 1905. With the right code on the item, every bill charges the right rate without anyone thinking about it. Set it once per product, not once per bill. Kownt X's product catalogue stores HSN and tax codes with each product.