HSN code-stands for “Harmonized System of Nomenclature”. This system was developed for the systematic classification of products or goods all around the world. The system nomenclature was developed by WCO (World Customs Organisation) and came into effect in 1988. A 6-digit uniform code acknowledged as HSN Code classifies more than 5000 goods and is endorsed worldwide.
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The list contains all hs codes chapters with their description. Individual chapter details are present inside the links
HSN Code consists of about 5,000 commodity groups and each of them is identified by a six-digit code, that has been arranged in a legal and logical structure. Well- defined set of rules acts as a sole support in order to achieve uniform classification. HSN code was developed and widely classified for taxation purposes. It helps in the identification of the rate of tax applicable to a specific product in a country that is under review. Apart from that, it can also be used in the calculations involved in claiming benefits. You can download the list of hs codes from here
The sole purpose of HSN Code is to classify goods systematic and logical manner from all over the world. It is highly important for bringing a uniform classification of goods and to facilitate international trade.
The purpose of HSN codes under GST is to make GST highly systematic and globally accepted. HSN codes came with the removal of the need of uploading the detailed description of the goods. This resulted in saving time along with making the filing procedure easier as GST returns are automated. A dealer/trader or a service provider have to provide a summary of sales as per HSN/SAC in the GSTR-1 if the annual turnover falls in above mentioned slabs.
As per the CGST Rules, any sort of tax invoice, credit note, debit note must consist of UQC or quantity unit description. For example: 500 metres of fabric
For minimizing errors while filing GST returns, it is highly important to know the right HSN code of the product.
Use HSN Calculator in order to find out the HSN code for your product. You just need to select the product which you want to sell for once in the code calculator and then the related HSN code will be automatically generated.
You can visit our handy HSN finder or we can say hsn code finder in order to find out HSN codes of goods and services of your requirement.
The HSN full form-Harmonized System of Nomenclature is a system which is used by 200+ countries and economies for the following reasons:
Almost 98% of the overall merchandise within the international trade is classified using HSN terms.
HSN number or code for each product have been accepted by most countries. Additionally, HSN number used in certain countries may vary a little, based upon the nature of products being classified.
The mass adoption of the HSN code system internationally authenticates how beneficial role it plays in classifying the items.
Since 1971, India is a member of the World Customs Organization (WCO). Originally India was using 6-digit HSN codes for classifying goods for Customs and Central Excise. Later on, Customs and Central Excise decided to add two more digits for making the codes more precise and this resulted in an 8-digit classification.
Even Goods and Services Tax (GST) has adopted the HSN Code system for classifying the goods and this resulted as GST HST code.
The HSN code structure consists of 21 sections, having 99 Chapters, about 1,244 headings, along with 5,224 subheadings.
Every Section is further divided within Chapters. Each Chapter is categorised into Headings. Each and every Heading is divided within Sub Headings.
Section and Chapter titles are used to describe broad categories of goods, whereas the headings and subheadings are used to describe products in detail.
HSN depends on a number of things mentioned below:
No HSN code is required for the businesses who are having annual turnover less than 1.5 crore INR-Any company with turnover within the range 1.5 crore INR- 5 crores INR.
2-digit HSN code will be required in the case any business is having an annual turnover of more than INR 5 crores.
Any business involved in export and import or international trade, irrespective of turnover must use 8 digit HSN code.
HSN Code and SAC code should be mentioned at the time when you register for GST, for your invoices, as well as on your GST returns that further needs to be uploaded on the GST Portal.
Businesses having an annual turnover of less than R1.5 Crores falls in the category where they don’t require to use HSN codes for selling their goods. In addition, we can say businesses being registered under the composition scheme are the ones which are not required to mention HSN codes-on the invoices.
2-digit codes: Businesses having an annual turnover of the range Rs. 1.5 crores to 5 crores will require 2-digit codes.
4-digit codes: Businesses having an annual turnover of Rs. 5 crores or more will be requiring 4-digit codes.
8-digit codes: This has been considered as the worldwide standard. This has been made compulsory in the case of import/export of goods or we can say international trade.
Under HSN Code products are classified under-sections, chapters, headings, as well as subheadings. For example, while exporting fresh-bananas, you will find related HSN code under
Section 02: Vegetable Products;
Chapter 08: Edible fruits and nuts; peel of citrus fruits or melons;
Heading 03: Bananas including Plantains;
Subheading 9010: Bananas, fresh.
0803 will be the required HSN code and for exporting bananas,
the eight-digit HSN code will be 08 03 9010.
HSC Code illustration [XX] - chapter, [XX] - heading, [XXXX] subheading
HSN code was introduced for the sole purpose of providing standardization along with the global acceptance of the products. Under GST regime all the businesses on which HSN system is applicable are supposed to get HSN code in order to levy the proper-rate of taxes applicable on their businesses which has been set by the concerned authorities of India.
Well the answer is No, HSN codes do not apply to all businesses and industries. The businesses which has been excluded from this are - Any business having annual turnover less than 1.5 crore INR in other words businesses being registered under GST composition scheme.
Yes, because it is quite difficult for the business to enlist every detail of the importer or dealer. Thus, businesses can easily opt for HSN code that helps them in better time management. But businesses are advised to carefully choose the HSN code during the filing of details in the GST Return. Additionally, for an expert advice regarding the Search HSN Code, Connect2India trade experts are here to help.
Service Accounting Code (SAC) is a unique code which is quite similar to the International HSN codes in a number of ways. SACs are typically issued by Central Board of Indirect Tax in order to classify each service for identifying the applicable rate of tax over the respective services. These SACs are usually used while generating invoices for the services being rendered.
UQC stands for Unique Quantity Code. It is globally accepted unit of measurement for trading such as 1 kilogramme of rice, 1 litre of oil etc.
HSN code is globally recognized system of classifying as well as codifying products from all over the World. It makes GST compliant to meet with international standards and to ensure the proper levy of taxes. HSN Codes provides a systematic and logical way of classification of goods, thereby decreasing the chances of any kind of misinterpretation. Moreover, a common structure allows the governments of countries for collaborating the data of purchases and sales of products and in analysing the same. Post to such an analysis, they can eventually decide over macroeconomic policies which are relatable to important goods.
Yes, HSN Codes and SAC can be accessed from the Ministry websites too. These codes are efficiently controlled by the ACES website, which in the past was used by the Central Board of Excise and Customs (CBEC) for their operations.