HSN is an acronym for ‘Harmonised System of Nomenclature,’ which was created by the World Customs Organisation (WCO) to standardise the classification of goods worldwide. HSN has a six-digit universal code that defines over 5,000 goods and is accepted globally.
What Exactly Is an HSN Code?
How to find my 6-digit HSN code: It removes uncertainty and makes it easier to conduct business on a national and worldwide scale. Over 20,000 goods are traded using HSN codes across countries throughout the world. More than 90% of global trade is handled by the WCO using the new HSN codes. By approving the HSN codes procedure, India has now joined the community.
How to Find 6-digit HSN Codes
HSN codes are used to classify goods and services, make sure that taxes are processed smoothly, and promote effective business operations. Understanding the meaning of HSN codes as a business owner or a responsible taxpayer gives you the ability to accurately and confidently negotiate the complexity of GST. use this process to Find HSN/ SAC Code In GST Portal :
- Access the GST Portal homepage and sign in with your valid credentials
- From the menu select Services > User Services > Search HSN/SAC Code
- Choose a Search type
- Search for the goods or service type you’re looking for under the Search by or Search Under Choose a Category section and select it from the drop-down list of HSN Chapter Search by Name or Code
- Enter the HSN code or the name of the chapter whose rates interest you in the ‘Search HSN Chapter by Name or Code’ box
- Find out the HSN Code Additionally, enter the HSN code for the items whose tax rates you want to look up in the area labelled ‘Search HSN Code.’
- Choose the ‘Search‘ menu item. Once all the information has been entered, choose ‘Search.’
In India, Who Is Required to Utilise the HSN Code?
HSN codes are widely used by retailers and wholesalers in India. They should utilize 2-digit, 4-digit, or 8-digit HSN codes for trading in India or outside of India based on the following laws and notifications:
- The HSN codes are not necessary if the business turnover is less than ₹1.5 crores; however,if the business turnover is between ₹1.5 crores and ₹5 crores, the HSN codes must be used for commercial trades
- Only four-digit HSN numbers can be used for companies with annual revenues of more than ₹5 crores.
8-digit HSN numbers are required for import and export transactions, as well as international exchanges.
- Items are categorized into distinct 21 divisions, 99 chapters, 1244 headings, and 5244 subheadings under the HSN module, for example, Almost all commodities in trade are covered
- HSN Code: 39 08 90 20 at random from the list of HSN codes
- The first two numbers reflect the HSN code chapter (39)
- The following two numerals (08) are the chapter headers
- The next two digits (90) denote the sub-headings, followed by six digits. The HSN code is recognized internationally
- The following two digits (20) subdivide the tariff heading of the products during supply import and export
Under India’s GST system, using HSN codes would help you save time and money.
What Is the Significance of the HSN Code?
Because the HSN Code is a globally recognized product classification standard, it provides a reasonable manner of identifying commodities for both domestic and international trade.It can be used to collect data and comprehend foreign and domestic trade that occurs both within and outside the country in a far more effective manner. This will also aid the government in determining macroeconomic policies about the trade of certain commodities. Timely GST number apply ensures compliance with tax regulations.
Who Offers HSN Code?
DGFT is in charge of any revisions, formulation, or addition of new codes to the HSN Codes (Directorate General of Foreign Trade). As part of the continual process of refining HSN Codes, changes to product descriptions, the removal of dead codes, the insertion of new codes, and so on are made regularly.
How Does the HSN Code Search Work
Enter the name of your product to get a list of the most relevant 4-digit HSN Codes. If none of the recommendations have the correct HS code, click search to get all results. Click on the 4-digit code to see the 6 and 8-digit HS codes for export-import reasons, as well as the GST rates.
Enter the first two or four digits of the HSN Code to begin your search.
How to Utilise an HSN Code With a Category List
Under All Categories, we have divided the list of HSN Codes into 23 major divisions. Navigate from this menu to the 2-digit, 4-digit, 6-digit, and 8-digit HSN Codes. By clicking on a four-digit code, you may find GST rates for HSN Codes.
Use our GST tax calculator to figure out the exact GST amount. The best GST calculator online!
Is It Necessary to Have an HSN Code?
The ITC-HS Codes are required for exports. Otherwise, the export incentives will be forfeited if the 8-digit HSN Code is not supplied on the shipping bill. HSN Codes are not required under GST for businesses with a turnover of less than ₹ 1.5 crore or if the dealer is registered under the GST Composition Scheme.
Additional Information About HSN Code and GST
An HSN or tariff number would be required on all invoices issued by GST-registered businesses with a turnover of more than ₹ 5 crore, according to the Ministry of Finance. On April 1st, 2021, the rule went into force.
“Having effect from April 1, 2021, a GST taxpayer with a prior fiscal year turnover of more than ₹ 5 crore must submit a 6 digit HSN Code (Harmonised System of Nomenclature Code) or, as the case may be, SAC (Service Accounting Code) on invoices issued for deliveries of taxable goods and services. There is an HSN code requirement on B2B invoices if the previous fiscal year’s turnover was up to ₹ 5 crore. Previously, the number of digits required was four and two.”
Six-digit HSN codes are commonly used for commodities. Consequently, both Customs and the GST utilise the identical HSN codes. Consequently, the codes from the Customs Tariff are also used for GST (as has been specifically mentioned in the GST rate schedule). Headings (4 digits HS), subheadings (6 digits HS), and tariff items are all categorised under HS codes in Customs Tariffs (8 digits).
Check Here To More About: https://www.cbic.gov.in/htdocs-cbec/customs/cst2022-010122/cst-idx
Conclusion
Furthermore, the GST portal includes an HSN search function. HSN Codes are extensively used by manufacturers and importers/exporters. Manufacturers were already supplying these codes before the implementation of the GST regime. Importers and exporters provided these codes in import/export paperwork. Invoices from manufacturers and importers typically include HSN numbers, which are commonly used by traders. Many GST taxpayers are already providing HS codes/SACs with 6/8-digit numbers on invoices, e-way bills, and GSTR 1 reports willingly as a result of this change. Vakilsearch offers one stop solution to meet all of your tax obligations. contact us now!
Frequently Asked Questions
What is the HSN code benefit?
More than 5,000 commodity groupings are categorised by the HSN code, which uses a standard 6-digit code. The codes are logically and legally constructed, which aids in achieving uniform classification by applying predetermined guidelines. Worldwide, the HSN code is in use in more than 200 nations.
Is HSN code necessary in GST?
Yes, it is required; the specifics change depending on turnover. Four-digit numbers for B2B supply up to ₹5 crores, and six-digit codes for sales above ₹5 crores
Who is Required to submit the 6-digit HSN code?
Taxpayers having an Aggregate Annual Turnover (AATO) of ₹5 crores or more must include the HSN code in their e-invoices, with at least six digits. This mandate will go into effect on 15 December 2023.
What is the full form of HSN Code?
HSN stands for Harmonized System of Nomenclature
Is HSN code 4 digit or 8 digit?
Generally, HSN codes consist of six digits. On the other hand, our eight-digit HSN codes in India are as follows: the first two are the chapter number, the next two are the heading number, the next two are the sub-heading, and the final two are the tariff item.
