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.
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.
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).
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.
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.
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.