HSN Code is a unique code issued to classify and identify goods in a systematic manner all over the world. It is developed and maintained by the World Customs Organisation (WCO) and it is in the use since 1988. Today you will be able to know all about the HSN Code and its applicability in India.
Contents of this post
What is the Full Form of the HSN Code?
HSN code stands for “Harmonized System of Nomenclature” and It is also known as the Harmonized System (HS) of tariff nomenclature is an internationally standardized system of names and numbers to classify traded products.
What is the HSN code in India?
HSN code is a code that represents a product in a list of different types of Goods and tells us the product type, name, and tax applicability. HSN code stands for “Harmonized System of Nomenclature and it includes 4 to 8 digit numbers. It is helping in the new GST Tax System in India for better classification of Goods.
India is a member of the World Customs Organization(WCO) since 1971. It was originally using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central Excise added two more digits to make the codes more precise, resulting in an 8-digit classification.
How would you explain the HSN code?
HSN code stands for “Harmonized System of Nomenclature. It can be explainable through the HS code structure. The HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and 5,224 subheadings.
- Each Section is divided into Chapters.
- Each Chapter is divided into Headings.
- And each Heading is divided into Sub Headings.
- Then further into the tariff item
Section and Chapter titles describe broad categories of goods, while headings and subheadings describe products in detail.
- Find HSN and SAC code with tax rates- Updated
- List of HSN Code chapter-wise updated
- HSN Code for live animals under GST
- HSN Code for Meat and edible meat offal
- HSN code for fish and crustaceans, mollusks
- HSN Code for Dairy produce, birds eggs, honey, etc.
- Products of animal origin-HSN Code for chapter-5
- HSN Code for Live trees & other plants-chapter-6
- HSN Code for edible vegetables under chapter-7
- HSN Code for coffee, tea, mate & spices- chapter 9
What is an HSN code example?
Handkerchiefs made of Textile matters 62.13.90
The first two digits (62) represent the chapter number for Articles of apparel and clothing accessories, not knitted or crocheted.
The next two digits (13) represent the heading number for handkerchiefs.
Finally, the last two digits (90) are the product code for handkerchiefs made of other textile materials.
India has 2 more digits for a deeper classification.
If the handkerchiefs are made from a man-made fiber, then the HS code is 62.13.90.10.
If the handkerchiefs are made from silk or waste from silk., then the HS code is 62.13.90.90.
Is HSN mandatory?
HSN code is mandatory and needs to declare from 01 April 2021 as per the table given below-
| No of digits | Turnover | Types of Invoice |
|---|---|---|
| 4 | Up to 5 Crore | Mandatory for B2B Tax Invoice |
| 4 | Up to 5 Crore | Optional for B2C Tax Invoice |
| 6 | Above 5 Crore | Mandatory for All Invoice |
| 8 | Mandatory for Invoice of Export and Import (International trade) |
How does the HSN code work?
It has about 5,000+ commodity groups, each can be identified by a four, six, and eight-digit code, arranged in a legal and logical structure. It is supported by well-defined rules to achieve uniform classification. You will be able to confirm product type, name, and tax rate.
Why HS code is important?
HS code is important because this brings in a uniform classification of goods and facilitates such as-
- Easy classification of Goods
- Simple Identification of Goods
- Systematic and logical manner.
- And facilitates easy international trade.
- Easy differentiation of goods.
Why is an HSN code required?
The use of the HS code is required because it helps in trade such as
- To make GST systematic and globally accepted
- No need for a detailed description of the goods
- Easy classification of Goods
- Simple Identification of Goods
- Systematic and logical manner.
- And facilitates easy international trade.
- Easy differentiation of goods.
- for saving time and easy filing returns.
How do I find my HSN codes?
You can find the HSN code for your tradable product from the list of HSN codes by entering your product name in the search box or can be searched in Google also. And moreover, you can use the GST portal or GST council HSN codes searching tool.
How do I write an HSN code?
You will have to mention the HSN Code of an item in the Tax invoice on the sale of that item. For example, Mr. Ram runs a mobile shop and he sold 5 mobiles of Rs 6000 each on 30.11.2022 to Lucky. Now Mr. Ram will raise a Tax invoice on 30.11.2022 to the lucky mentioning the HSN Code of mobile that is 8517.
Who made HSN Codes?
HSN codes have been developed and maintained by World Customs Organisation. HSN codes help in classifying goods and standardizing their understanding across nations. And the HSN codes are similar in all the countries which are under WCO. They use 6 digit HS code for the goods.
Is 8 digit HSN code mandatory?
The 8-digit HSN code is mandatory in case of export and import of Goods. If a Person trades any item internationally then he will have to mention an 8-digit HS code of that tradable Item in the tax invoice.
How do I find my 8-digit HSN code?
You can find the HSN code of 8-digits for your tradable product from the list of HSN codes by entering your product name in the search box or You can search in Google also. And moreover, you can use the GST portal or GST council HSN codes searching tool. The 8-digit HS code is mandatory in case of export and import of Goods.
What is turnover for the HSN codes?
if your turnover of last previous year is up to 5 crores then 4 digits and above 5 crores then 6 digit HS code will be used and for more details check out below table-
| No of digits | Turnover | Types of Invoice |
|---|---|---|
| 4 | Up to 5 Crore | Mandatory for B2B Tax Invoice |
| 4 | Up to 5 Crore | Optional for B2C Tax Invoice |
| 6 | Above 5 Crore | Mandatory for All Invoice |
| 8 | Mandatory for Invoice of Export and Import (International trade) |
How do I find my 6-digit HSN code?
You can find the HSN code of 6-digits for your tradable product from the list of HSN codes by entering your product name in the search box or you can search in Google also. And moreover, you can use the GST portal or GST council HSN codes searching tool. The 6-digit HSN code is mandatory if the turnover of the previous year is above 5 crores.
Who can use 4-digit HSN codes?
You can use 4 digit HSN codes if your previous year’s turnover is up to 5 crore
| No of digits | Turnover | Types of Invoice |
|---|---|---|
| 4 | Up to 5 Crore | Mandatory for B2B Tax Invoice |
| 4 | Up to 5 Crore | Optional for B2C Tax Invoice |
Is it mandatory to have a 6-digit HSN code?
Yes, if your turnover is above 5 crores during the previous year then you will have to use 6-digit HSN codes for your product in the Tax invoice.
Is HSN Code worldwide?
The HSN system is using more than 200 countries and economies for reasons such as:
- Uniform classification
- The base for their Customs tariffs
- Collection of international trade statistics
Over 98% of the merchandise in international trade is classified in terms of the HSN. Harmonized System of Nomenclature numbers for each commodity is accepted by most the countries. The HSN number remains the same for almost all goods. However, the HSN number used in some of the countries varies little, based on the nature of goods classified.
An Accountant, GST Practitioner, GST blogger, Website Developer, SEO Builder & Ceo & Co-founder of website https://gstportalindia.in for the help of GST Taxpayers of India. Having a perfect accounting experience of more than 10 years in a Private Company.