8-digit HSN code notifications bring important updates to product classification. Staying informed about these changes is crucial for accurate tax compliance and proper product categorization.
The Harmonized System Code (HSN) is an international standardized system of nomenclature for the classification of traded products. It was developed by the World Customs Organization (WCO) and is used by over 200 countries and territories. The HSN code is a six-digit number that is assigned to each product. The first two digits identify the chapter, the next two digits identify the heading, and the last two digits identify the subheading.
In India, the government has mandated the use of 8-digit HSN codes for certain products, including chemical products. This notification was issued in 2020, and it requires all registered taxpayers to mention the 8-digit HSN code on their tax invoices for chemical products.
The use of 8-digit HSN codes has several benefits, including:
- Improved accuracy of tax reporting
- Reduced tax evasion
- Easier identification of taxable goods and services
If you are a registered taxpayer who sells chemical products, you are required to use 8-digit HSN codes on your tax invoices. You can find the applicable HSN code for your products by using the search tool on the website of the Central Board of Indirect Taxes and Customs (CBIC).
Here is a table of some of the most common chemical products and their corresponding 8-digit HSN codes:
| Product | HSN Code |
| Acetic acid | 29152910 |
| Sulfuric acid | 28070000 |
| Sodium chloride (common salt) | 28291000 |
| Ammonia | 28153000 |
| Methanol | 29051100 |
The Harmonized System Code (HSN) is a globally recognized standardized system for classifying traded goods. It comprises a six-digit numerical code structure, with each digit representing a specific classification level. The HSN code extends to eight digits for chemical products to provide a more detailed and precise classification.
Significance of 8 Digit HSN Codes for Chemical Products
The eight-digit HSN codes for chemical products play a crucial role in various aspects, including:
- Customs Procedures: HSN codes are essential for customs clearance and identification of chemical products during international trade.
- Taxation and Regulatory Compliance: Accurate HSN codes are crucial for determining applicable taxes, duties, and regulatory requirements for chemical products.
- Product Identification and Tracking: HSN codes facilitate identifying and tracking specific chemical products across the supply chain.
- Statistical Analysis and Trade Monitoring: HSN codes enable the compilation of accurate trade statistics and monitoring chemical product trade flows.
Understanding the HSN Code Structure for Chemical Products
The eight-digit HSN code structure for chemical products is organized hierarchically, with each digit representing a progressive classification level.
- Chapters (First Two Digits): The first two digits identify the chapter to which the chemical product belongs. For instance, Chapter 28 covers inorganic chemicals, while Chapter 38 covers miscellaneous chemical products.
- Headings (First Four Digits): The first four digits identify the heading within a chapter. For example, heading 2804 within Chapter 28 covers sulfur and its inorganic compounds.
- Subheadings (First Six Digits): The first six digits identify the subheading within a heading. For instance, subheading 2804.50 within heading 2804 covers sulfur dioxide.
- Tariff Items (Eight Digits): The eight-digit HSN code represents the most specific classification level, the tariff item. For example, tariff item 2804.50.10 within subheading 2804.50 covers sulfur dioxide, liquefied.
Benefits of Using 8 Digit HSN Codes for Chemical Products
The adoption of eight-digit HSN codes for chemical products offers several benefits, including:
- Enhanced Accuracy and Precision: The eight-digit codes provide a more detailed and precise classification of chemical products, reducing misclassification and ensuring accurate identification.
- Streamlined Customs Processes: Accurate HSN codes facilitate faster customs clearance and reduce delays associated with misclassification.
- Simplified Tax and Regulatory Compliance: Correct HSN codes simplify tax and regulatory compliance, minimizing the risk of penalties and ensuring adherence to legal requirements.
- Improved Trade Data and Analysis: Eight-digit HSN codes enable the collection of more accurate and detailed trade data, facilitating better trade analysis and monitoring of chemical product trade trends.
Read More: - Structure of HSN Code in GST Portal
- HSN code on GST portal
