HSN CODE FINDER TOOL
What is the HSN Code?
HSN Stands for Harmonized System Nomenclature. The internationally adopted system of commodity description and product nomenclature system developed by the World Customs Organization came into existence in the year 1988. Under the taxation system of GST, the goods and services transacted in India are either classified under the HSN Code system or the SAC Code System. HSN is for the nomenclature for goods whereas, the SAC system is for Services. On the basis of the nomenclature, the GST Rates have been put into 5 slabs. The tax slabs are as follows: NIL, 5%, 12%, 18% and 28% .
The HSN Code is used by over 200 countries as a basis for their customs tariffs. As of this day, close to 98% of all merchandise in international trade are classified under the HSN Code. The current edition of HSN Code is the 2017 edition prior to which, HSN Code-2012 Edition was in implementation.
The HSN Codes are first classified into sections, then chapters, and contains the six-digit codes of the Harmonized System.
The SAC Code or Services Accounting Code is essentially a classification system for services developed by the Service Tax Department in India. On the basis, of the SAC code, the rates of GST have been slotted into 5 tax slabs. These slabs are the same as goods i.e. NIL, 5%, 12%, 18%, and 28%.
HSN Code: Working
The HSN has over 5,000 Commodity Groups each of which is identified by a 6-digit code, arranged in a legal and logical manner. The uniform classification of the goods has been achieved by putting in well-defined rules and regulations. HSN helps classify the goods and services from all over the world systematically. The HSN Code is used for a variety of reasons.
- Uniform Classification
- The basis for Customs Tariffs
- Collecting international trade Statistics
The HSN system of the commodity description is acceptable in most countries. The HSN number remains the same for almost all goods. However, the code could vary a little, based on nature of the goods under classification.
HSN in India
India has been a member country of the World Customs Organization since 1971. In India, 6-digits HSN codes were being used to classify commodities for Customs and Central Excise. Later on, the Customs and Central Excise added two more digits to make it a more precise 8-digit classification in India. This means India has a 8-digit HSN Code.
HSN Code: Structure
The HSN structure contains a grand total of 21 sections, with 99 chapters, close to 1,244 headings, along with 5,224 subheadings.
- Each Section is divided into Chapters. Each Chapter is divided into Headings. Each Heading is divided into Sub Headings.
- Section and Chapter titles describe broad categories of goods, while headings and subheadings describe products in detail.
0701 10 00 is the HSN Code for Potato seeds
- The first two digits (07) represent the chapter number for Edible Vegetables, Roots, and Tubers
- Next two digits (01) represent the heading number for Potatoes Fresh or Chilled
- Finally, last two digits (10) is the product code for Seeds
India has 2 more digits for a deeper classification.
Services Accounting Code (SAC): Structure
Similar to goods, the Services in India have also been put in a code for uniform recognition, measurement, as well as, taxation. The Codes for services are called Service Accounting Codes or SAC.
For example Higher education services, general SAC 999241
- The first two digits are the same for all services i.e. 99
- The next two digits (92) represent the major nature of service, in this case, education services
- The last two digits (41) represent the detailed nature of service, i.e. Higher Education Services
HSN in GST
HSN codes to be declared
|Turnover||Number of Digits of HSN to be Declared|
|Upto ₹ 1.5 Crore||0|
|₹ 1.5 Crore- ₹ 5Crore||2|
|₹ 5 Crore and Above||4|
- HSN Codes must be furnished in every tax invoice issued by the taxpayer under GST
- Turnover for the previous financial year will be taken as a basis for the number of HSN number digits to be revealed
HSN code and all of its 8 digits are mandatory in case of goods and services under the Import-Export Code regulations.HSN codes have been implemented with an aim to make GST a globally accepted system of taxation in India. The implementation of the HSN code system has eliminated the need to upload a detailed description of the goods and services furnished by businesses.
A dealer or a service provider is required to furnish the HSN/ SAC wise summary of sales made in the GSTR-1 if the turnover of the organization falls in any one of the prescribed slabs.
|Sections||HSN Code List|
|Section 1||Live Animals|
|Section 2||Vegetable Products|
|Section 3||Animal or Vegetable Fats and Oils and their cleavage products, prepared edible fats, Animal or Vegetable Waxes|
|Section 4||Prepared Foodstuffs, Beverages, Spirits and Vinegar, Tobacco and Manufactured Tobacco Substitutes|
|Section 5||Mineral Products|
|Section 6||Product of the chemicals or allied Industries|
|Section 7||Plastics and articles thereof, Rubber and articles thereof|
|Section 8||Raw hides and skins, Leather, Furskins and articles thereof, saddlery and harness, travel goods, handbags and similar containers, articles of animal gut ( other than silk-worm gut )|
|Section 9||Wood and articles of wood, Wood charcoal, Cork and articles of cork, Manufacturers of straw, of Esparto or of Other Plaiting Materials, Basketwork and Wickerwork|
|Section 10||Pulp of wood or of other Fibrous Cellulosic Material, Recovered ( Waste and scrap ) paper or paperboard, paper and paperboard and articles thereof|
|Section 11||Textile and textile articles|
|Section 12||Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, seat-sticks, whips, riding-crops, and parts thereof, Prepared feathers and articles made therewith, Artificial flowers, Articles of human hair|
|Section 13||Articles of stone, plaster, cement, asbestos, mica, or similar materials, ceramic products, glass and glassware|
|Section 14||Natural or cultured pearls, Precious or semi-precious stones, precious metals, Metal clad with precious metal, and articles thereof, Imitation Jewellery, Coins|
|Section 15||Base Metals and Articles of Base Metal|
|Section 16||Machinery and mechanical appliances, electrical equipment, parts thereof, sound recorders and reproducers, television image and such recorders and reproducers, and Parts and Accessories of such article|
|Section 17||Vehicles, Aircraft, Vessels and Associated Transport Equipment|
|Section 18||Optical, Photographic, Cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus, clocks and watches, musical instruments, parts and accessories thereof|
|Section 19||Arms and ammunition, parts and accessories thereof|
|Section 20||Miscellaneous Manufactured Articles|
|Section 21||Works of art, Collectors’ Pieces and antiques|
UQC full form is Unique Quantity Code. In layman’s terms, it’s the unit of measurement of the particular good delivered suchs as Kg for wheat, Litres for Oil and so on. In GST, UQC as per CGST, any tax invoice, credit note, debit note, must have UQC or quantity unit description.
For ex- 100 meters of Fabric
It is pivotal to understand the GST Code of a particular good/ service in order to avoid errors during the GST return filing