HSN is an abbreviation for Harmonised System of Nomenclature. This system categorizes more than 5000 products globally. It was developed by WCO (World Customs Organization) with the target of standardizing all the goods throughout the world.
GST rate for HSN code
An 8-digit code, HSN code is used to find out the appropriate GST (Goods and Services Tax) rate on various products as per the CGST (Central Goods and Services Tax) rules.
The harmonised system of nomenclature includes 21 sections, 99 chapters, around 1244 headings, and 5224 subheadings. Here, the section and chapter names represent the wider categories of goods, while the heading and subheading names explain the items thoroughly.
At AllIndiaITR, you can find more information on the impact of GST tax at what is GST tax.
Application of HSN
India had already been using this system for Central Excise and Customs, but, since the implementation of GST, it’s become mandatory to mention this code in the tax invoice.
The conditions mentioned below are necessary to follow:
- Companies with a turnover up to Rs 1.5 crores, don’t need to provide any code
- Companie with a turnover of Rs 1.5 crores and Rs 5 crores will use a 2-digit code
- Companies with a turnover more than Rs 5 crores will use a 4-digit code
- Companie dealing in exports or imports will submit the full 8-digit number, irrespective of the turnover
GST Rate Finder
Here, you need to enter either a product name or its code.
The product name can be any term indicating the section, chapter, heading, or subheading (basically the category under which the item falls).
The code should be 8 digits at maximum, for example – 8216, 21029040, etc.
We hope you now have a much better understanding of HSN codes. Thus, in order to avoid mistakes, always write the correct HSN code while filing your GST tax return.
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