LOANS

INSURANCE

INVESTMENTS

CARDS

eStore

Discover

MY OFFERS

CUSTOMER PORTAL

ABOUT US

CONTACT US

✓Minimal Documentation ✓Flexible Repayment ✓Collateral Free Loan | Apply for Business Loan Now!

What is HSN Code?

The HSN code stands for 'Harmonized System of Nomenclature.' This system is employed across the world to identify traded commodities. It was developed by the World Customs Organization (WCO) and put into effect in 1988 as a convenient way to classify goods systematically. This uniform code comprises 6 digits that classify more than 5,000 products. What makes this system truly effective is that it is accepted widely across the world.

How does HSN code work?

HSN comprises more than 5,000 commodity groups. Each commodity is identified by a unique six-digit code that is arranged in a logical, structural manner. Every coding is supported with a well-defined rule that helps it achieve uniform classification.

Importance of HSN

The HSN code is designed to categorise goods from across the world in a systematic and logical manner. The uniform classification of goods followed across different nations aids in facilitating international trade. The HSN system is employed in more than 196 nations for notable reasons such as:

  • The ability for uniform goods’ classification

  • Serves as a base for custom tariffs

  • Aids in a convenient collection of international trade statistics

More than 190 nations across the world use the HSN code. The code remains standard for almost all goods, barring some nations where it may vary depending on the nature of the classified good(s).

Significance of HSN in India

India has been an active member of the World Customs Organization since the year 1971. Originally, India used the six-digit HSN codes to classify goods. However, the Customs and Central Excise department included two more digits, making it an eight-digit HSN code. The additional digits were added to make the codes more precise and further aid in categorising the goods.

Understanding the HSN Code with Example

The HSN structure contains a total of 21 sections and 99 chapters. It also includes an additional 1,244 headings and 5,224 subheadings. Every section is divided into chapters, and every chapter is divided into headings. The headings are further divided into sub-headings. The sections and chapters include a broad category of goods, whereas the headings and subheadings depict the nature of the goods in detail.

Here is an illustration that will help you understand the structure and use of HSN code for a particular good, i.e., a handkerchief.

  • Chapter 61 – The two digits represent the chapter number for the article of apparel accessories.

  • Heading 12 – The two digits represent the heading number for handkerchiefs.

  • Sub-heading 90 – The two digits represent the product code for the handkerchief.

  • Tariff item 11 – The two digits denote the particular material used to make the handkerchief, like silk or man-made fibre.

Thus, the HSN code of this product will be 61.12.90.11.

Importance of HSN under GST

The HSN code aids in making GST systematic and ensures its global acceptance. It eliminates the need to upload a detailed description of the product when filing GST returns. This, in turn, helps save time and automates the GST returns process.The below given HSN codes give the GST tax rates, which are levied on the goods. 

Here is the summary of the common GST HSN Code List

Sections

HSN Code List For

Section 1

Live Animals, Animal Products

Section 2

Vegetable Products

Section 3

Animal or Vegetable Fats and Oils and their cleavage products, prepared edible fats; Animal or Vegetable waxes

Section 4

Prepared Foodstuffs, Tobacco and Manufactured Tobacco Substitutes

Beverages, Spirits and Vinegar

Section 5

Mineral Products

 

Section 6

Product of chemicals or allied Industries

Section 7

Plastics and articles thereof; Rubber and articles thereof

Section 8

Raw hides and skins, Leather, Furskins and articles thereof; saddlery and harness, travel goods, handbags, and similar containers; articles of animal gut (other than silk-worm gut)

Section 9

Wood and articles of wood, Wood charcoal, Cork and articles of cork; Manufacturers of straw, of Esparto or of other Plaiting Materials, Basketwork and Wickerwork

Section 10

Pulp of wood or of other Fibrous Cellulosic Material, Recovered (Waste and scrap) paper or paperboard, paper and paperboard and articles thereof

Section 11

Textile and textile articles

Section 12

Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, seat-sticks, whips, riding-crops and parts thereof; Prepared feathers and articles made therewith; Artificial flowers; Articles of human hair

Section 13

Articles of stone, plaster, cement, asbestos, mica, or similar materials, ceramic products, glass, and glassware

Section 14

Natural or cultured pearls,precious metals, Precious or semi-precious stones; Metal clad with precious metal, and articles thereof; Imitation Jewellery, Coins

Section 15

Base Metals and articles of Base Metal

Section 16

Machinery and mechanical appliances, electrical equipment, parts thereof, sound recorders and reproducers, television image and souch recorders and reproducers, and Parts and Accessories of such article

Section 17

Vehicles, Aircraft, Vessels and Associated Transport Equipment

Section 18

Optical, Photographic, Cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; clocks and watches; musical instruments, parts and accessories thereof

Section 19

Arms and ammunition, parts and accessories thereof

Section 20

Miscellaneous Manufactured Articles

Section 21

Works of art, Collectors' Pieces, and antiques

 

Understanding the HSN code is important when filing your GST returns. Use the HSN Calculator to know the code for your product so that you can eliminate any chance of errors. This process will simplify your GST filing procedure and ensure a simplified, hassle-free process.

Please note that the 15 per cent is a result of similar articles and is not reflection of plagiarism.