What is an HSN Code?
HSN stands for Harmonized System of Nomenclature. It’s a globally accepted system developed by the World Customs Organization (WCO) to classify goods systematically. In India, HSN codes are used under the Goods and Services Tax (GST) regime to identify products and determine applicable tax rates.
Structure of HSN Codes in India
India uses an 8-digit HSN code system:
- First 2 digits: Chapter number (broad category of goods)
- Next 2 digits: Heading (subcategory)
- Next 2 digits: Subheading (specific product)
- Last 2 digits: Further classification (used for deeper categorization in India)
Example: For “Handkerchiefs made of textile materials,” the HSN code is 62139010.
Applicability Based on Turnover
The requirement to mention HSN codes on invoices depends on the taxpayer’s annual turnover:
- Turnover up to ₹1.5 crore: HSN code not mandatory
- Turnover between ₹1.5 crore and ₹5 crore: 2-digit HSN code required
- Turnover above ₹5 crore: 4-digit HSN code required
- For imports and exports: 8-digit HSN code mandatory
Note: These requirements are as per the latest GST notifications.
How to Find the HSN Code for Your Product
1. GST Portal:
- Visit the official GST portal.
- Use the “Search HSN Code” feature by entering the product name or HSN code.
2. Third-Party Tools:
3. Downloadable Lists:
- Comprehensive HSN code lists are available in PDF and Excel formats for reference.
Chapter-Wise HSN Code Overview
HSN codes are organized into 21 sections and 99 chapters. Here’s a brief overview:
- Chapters 1-5: Animal products
- Chapters 6-14: Vegetable products
- Chapters 15-24: Foodstuffs, beverages, tobacco
- Chapters 25-27: Mineral products
- Chapters 28-38: Chemicals
- Chapters 39-40: Plastics and rubber
- Chapters 41-43: Hides, skins, leather
- Chapters 44-46: Wood and articles of wood
- Chapters 47-49: Paper and paperboard
- Chapters 50-63: Textiles and textile articles
- Chapters 64-67: Footwear, headgear, umbrellas
- Chapters 68-70: Articles of stone, plaster, cement, asbestos, mica
- Chapters 71: Natural or cultured pearls, precious stones, metals
- Chapters 72-83: Base metals and articles of base metal
- Chapters 84-85: Machinery and electrical equipment
- Chapters 86-89: Vehicles, aircraft, vessels
- Chapters 90-92: Optical, photographic, measuring instruments
- Chapters 93: Arms and ammunition
- Chapters 94-96: Miscellaneous manufactured articles
- Chapter 97: Works of art, collectors’ pieces, antiques
For a detailed list, refer to the GST HSN Code List.
Importance of Correct HSN Codes
- Accurate Tax Calculation: Ensures the correct GST rate is applied.
- Compliance: Mandatory for GST return filings and invoicing.
- International Trade: Facilitates smooth customs clearance for imports and exports.
Understanding and correctly applying HSN codes is crucial for businesses to ensure compliance and accurate tax calculation under the GST regime.
