HSN code

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What do you mean by HSN code?

‘Harmonized System of Nomenclature’ is the acronym for the HSN code. There has been a shift in the way that items are classified around the world. Henson Number is a six-digit code used to organize more than 5000 goods, and it’s recognized worldwide. WCO, or the World Customs Organization, developed it in 1988.

Why is the HSN code necessary?                               HSN Code         

Because the first six digits of the HSN code are identical in all countries, it is internationally recognized. HSN code systems in many countries now feature more than six digits. We can compare India to the United States, where the HTS Codes (Harmonized Tariff Schedule) have a 10 digit categorization.

Who needs it?

Manufacturers, importers, and exporters have been the primary users of the HSN Code for a long time. Manufacturers provided these codes before implementing GST as importers, and exporters have also offered them in their documents. For traders, HSN codes are often offered with the manufacturer or importer providers on bills sent to them.

Where do the codes come into play in the world of e-commerce?

Various services are also uniformly categorized for identification, measurement, and taxes. Services Accounting Code, or SAC, is a code for assistance. For mineral items, plastic articles, footwear, and even weapons and ammunition, HSN codes are required by law.

Is there an HSN code for services that can be used?

This code is required for both B2B and B2C tax invoices for taxpayers with an aggregate turnover of more than 5 crores in the preceding financial year.

How does HSN Code search work?

  • By entering the product’s name, you will receive a list of the most relevant HSN 4-digit codes. In addition, selected HS codes will be displayed in search results.
  • For export and import purposes, click on the 4 digit code to acquire the 6 and 8 digit HS code data.
  • You can search by HSN code. Start by entering the first two or four digits of the HSN Code. Then, to learn more about the HSN code, click on the relevant item in the search results.
  • To utilize HSN code with Category List, follow these steps: The collection of HSN Codes has been divided into 23 broad categories under All Categories.
  • Navigation is available from this menu to find out the HSN codes for 2, 4, 6, & 8 digits (as seen below). Use the four-digit code to find out the GST rates for HSN Codes.

Is the HSN Code required?

When it comes to exports, the HS codes play a vital role. Anyone who fails to include the 8-digit HSN Code on the shipping bill forfeits any export benefits. On the other hand, HSN codes are not required for enterprises with a turnover of less than Rs.15 crore or for dealers who have not registered themselves under the GST Composition Scheme.

Why Do ITC-HS Codes And HSN codes Have Different Meanings In The Industry?

In India, ITC stands for Indian Trade Classification or Indian Tariff Code. On the other hand, the ITC-HS is used for import and export activities in India. The second schedule covers the description of items. Thus, the ITC HS codes are separated into two parts or programs. To categorize “Tariff Items,” ITC has added two more digits to the HSN structure, bringing it up to a total of six numbers. 

FAQ About HSN Code 

✅ Is an HSN code required on a bill?

As per the provision to rule 46 of the regulations, it will be mandatory to identify the number of digits of the HSN code for products or services that a class of registered individuals shall be obliged to mention. 

✅ Is it mandatory to provide HSN/Service Accounting Codes?

Yes, it must give at least one good or service (one HSN or Service Accounting Code).

✅ While registering, how can I add products or services that have the HSN code?

The HSN Code is required when dealing with goods or commodities. The Service Accounting Code is necessary if your business deals with services. Five products and five services are allowed to be added. If you have more than five products or services, you must list the top five products or services you offer.

61051010 is an example of a code that has to be added. Steps to adding the HSN Code:

A. The first four-digit 6105 from the HSN Code in “Search by Chapter Name or Code” b.

B. In the HSN Code Search field, enter 61051010. You have successfully added an HSN Code.