HSN is
Harmonised System of Nomenclature. HSN number was already being used for
assigning Excise Duty on Manufactured goods in India.
International
Usage:
It is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. It is also extensively used by governments, international organizations and the private sector for many other purposes such as internal taxes, trade policies, monitoring of controlled goods, rules of origin etc.
It is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. It is also extensively used by governments, international organizations and the private sector for many other purposes such as internal taxes, trade policies, monitoring of controlled goods, rules of origin etc.
HSN
Requirments under Goods and Services Tax Law
Not all Suppliers need to mention HSN code on their invoices issued.
(Update on 16 june 2017)
– Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall mention 2 digit code on Invoice.
– Taxpayers whose turnover is Rs. 5 crores and above shall mention 4 digit code on Invoice
– Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices.
– Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall mention 2 digit code on Invoice.
– Taxpayers whose turnover is Rs. 5 crores and above shall mention 4 digit code on Invoice
– Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices.
Turnover for the purpose is PY turnover. In case of
new business, there is no circular/notification.
Services will be required to be classified per the
Services Accounting Code (SAC)
HSN
Sections
Below is the list of standard HSN Sections, these
are standard across all countries and economies.
- Section I (Chapters 1 to 5) – live animals and animal products
- Section II (Chapters 6 to 14) – vegetable products
- Section III (Chapter 15) – animal or vegetable fats and oils
- Section IV (Chapters 16 to 24) – beverages, spirits, vinegar, and tobacco
- Section V (Chapters 25 to 27) – mineral products
- Section VI (Chapters 28 to 38) – chemical and para-chemical products
- Section VII (Chapters 39 to 40) – plastics and rubber, and articles thereof
- Section VIII (Chapters 41 to 43) – certain animal hides and skins
- Section IX (Chapters 44 to 46) -wood, cork, manufactures of straw, and articles thereof
- Section X (Chapters 47 to 49) – pulp of wood, paper, paperboard, and printed products
- Section XI (Chapters 50 to 63) – textiles and textile articles
- Section XII (Chapters 64 to 67) – footwear, headgear, umbrellas, walking sticks, prepared feathers, artificial flowers, and articles of human hair
- Section XIII (Chapters 68 to 70) – articles made of minerals, stone, plaster, cement, etc., and ceramic and glass products
- Section XIV (Chapter 71) – precious metals and stones
- Section XV (Chapters 72 to 83) – base metals and articles thereof (Note: Chapter 77 is reserved for future use)
- Section XVI (Chapters 84 to 85) – machinery and mechanical appliances, electrical equipment, sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
- Section XVII (Chapters 86 to 89) – vehicles, aircraft, vessels, and associated transport equipment
- Section XVIII (Chapters 90 to 92) – optical, photographic, cinematographic, and musical apparatus and equipment; measuring, medical, surgical, and other instruments; and clocks and watches
- Section XIX (Chapter 93) – arms and ammunitions
- Section XX (Chapters 94 to 96) – miscellaneous manufactured articles
- Section XXI (Chapters 97 to 99) – arts, collector’s pieces, and antiques (Note: Chapter 99 is reserved for national use)
How to
Use HSN Search for GST?
Finding HSN code is not a 2 second job, you need to follow “Focus Down” approach to get your HSN Code. First narrow down to Chapter, then Section. Then select a HSN code which best describes your commodity.
1.
Start by searching for your goods or commodity in
Description Box.
2.
To restrict search, add 2 or more words in
description.
3.
Try to figure out, in which chapter your Product /
Good falls into.
4.
Enter chapter number in HSN Code, which will list
down all the codes in that chapter.
5.
Keeping Chapter number in HSN Code Filed, start
searching again using description.
6.
Try to figure out, in which section your Product /
Good falls into.
7.
Finally once you have first 4 digit of your hsn
code, search now only by hsn code (Enter 4 digit).
8.
Select a HSN code which best describes your C
ommodity/ Product / Good.
HSN code is only for Goods / Product / Commodity.
For Services, there are SAC Codes.
see more at https://gstindia.net/hsn/
