GST HSN Code
The World Customs Organization (WCO) invented and established the Harmonized System of Nomenclature, which is an HSN full form to classify products from all over the world in a standardized and rational manner. GST HSN code is a six-digit universal code that classifies over 5,000 goods and is used all over the world.
This collection of rules is used in taxes to determine the tax rate that applies to a commodity in a given region. It’s also used to figure out how much commodity is exported or imported into a region. It is a critical function for analyzing the global flow of commodities.
It is made up of various parts that are further divided into chapters, which are further divided into headings and subheadings. The six-digit code is the resultant number.
HSN Worldwide
HSN code full form – Harmonized System of Nomenclature. It is utilized by more than 200 countries and economies for reasons like:
- Uniform classification
- The base for their customs tariffs
- Collection of international trade statistics
More than 98% of the merchandise in international trade is classified in terms of the HSN.
GST HSN Code in India
India is preparing to implement its Goods and Services Tax, or GST, which would apply to all goods and services. Many indirect taxes would be absorbed, reducing the pressure on the final user. India has been using the HSN scheme in the Central Excise and Customs regime since 1986.
It’s a lot more complex grouping, with two more digits added to the six-digit structure. It’s a lot more complex grouping, with two more digits added to the six-digit structure. Indian manufacturers would be expected to follow a three-tiered HSN system under GST.
- HSN is not needed for those with a turnover of less than INR 1.5 crores.
- The 2 digit HSN codes are for businesses with a revenue of more than INR 1.5 crores but less than INR 5 crores.
- All with a turnover of more than INR 5 crores must use the four-digit HSN codes.
- Importers and exporters must adhere to the HSN codes, which are eight digits long.
HSN Code List Digits
The HSN is divided into 21 parts, each of which has 99 chapters, 1,244 headings, and 5,224 sub-headings. The section or chapter to which the product belongs is determined by its industrial and technical sophistication. As a result, all-natural materials, such as vegetables and animal products, are found in the earlier sections, whereas commercial equipment is found in the later stages.
Categories
The parts are divided into broad categories. Chapters, on the other hand, are classified even more precisely. Section 11 includes all types of textiles and clothing articles, while Chapter 62, which is part of Section 11, is specifically for men’s and women’s accessories.
Chapters have been subdivided into headings and subheadings as you progress down the chain. Under the Chapters, the headings concentrate on various categories of items. Continuing with the previous illustration, heading 13 of Chapter 62 covers all forms of handkerchiefs, while heading 14 covers various scarves and shawls. There is a commodity associated with each of these headings.
Example
Handkerchiefs made of other textile fabrics, for example, fall under heading 13 of Chapter 62. The product’s HSN code is 62.13.90, with 90 being the product code for handkerchiefs made of other textiles. The HSN code becomes 62.13.90.10 as the handkerchiefs are made from a human-made fiber. Similarly, 62.13.90.90 is used for silk handkerchiefs and silk waste.
When a substance is classified using the aforementioned structure, the General Interpretation Rules must be followed. When classifying a commodity, the trade jargon of the product must be tested first, not the technical exploitation. There is no need to dig down deeper in the strata below if the commodity is graded on the first rank.
HSN- Summary of Outward Supplies
|
Chapter |
Commodities |
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Section I. Animals and Animal Products |
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|
Chapter 1 |
Animals |
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Chapter 2 |
Meat and edible offal |
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Chapter 3 |
Fish, molluscs, and other aquatic invertebrates |
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Chapter 4 |
Dairy produce, birds' eggs, honey and other edible products of animal origin that are not specified anywhere else |
|
Chapter 5 |
Products of animal origin that are not specified elsewhere |
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Section II. Vegetables and Vegetable Products |
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Chapter 6 |
Live trees/plants, bulbs, roots, cut flowers and ornamental foliage |
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Chapter 7 |
Edible vegetables/certain roots/tubers |
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Chapter 8 |
Edible fruit and nuts, the peel of citrus fruits or melons |
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Chapter 9 |
Tea, coffee, spices and mates |
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Chapter 10 |
Cereals |
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Chapter 11 |
Milling products, wheat gluten, malt, starches, inulin |
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Chapter 12 |
Oil seeds and oleaginous fruits, grains, straw and fodder, seeds and fruit, and industrial or medicinal plants |
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Chapter 13 |
Lac, gum, resin, extracts, etc |
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Chapter 14 |
Vegetable plaiting materials/vegetable products that are not specified elsewhere |
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Section III. Animal/Vegetable Oils, their respective Cleavage Products, Waxes, Prepared Edible Fats |
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Chapter 15 |
Animal/vegetable oils, their cleavage products, etc |
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Section IV. Prepared Food, Beverages, Spirits, Tobacco and Tobacco Substitutes |
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Chapter 16 |
Preparation of meat, fish ,molluscs, etc |
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Chapter 17 |
Sugar/Sugar confectionery |
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Chapter 18x |
Cocoa/Cocoa preparations |
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Chapter 19 |
Preparations of cereals, flour, milk, pastry products |
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Chapter 20 |
Preparation of vegetables, fruits, nuts, plant parts |
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Chapter 21 |
Miscellaneous edible preparations |
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Chapter 22 |
Beverages, vinegar, spirits etc. |
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Chapter 23 |
Residue and food waste, prepared animal fodder |
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Chapter 24 |
Tobacco and tobacco substitutes that are made |
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Section V. Minerals |
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Chapter 25 |
Salt, stones, sulphur, plastering material, cement, etc |
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Chapter 26 |
Ores, ash and slag |
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Chapter 27 |
Mineral fuel, mineral oils, bituminous substances etc |
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Section VI. Chemical Products of Allied Industries |
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Chapter 28 |
Inorganic chemicals, organic/inorganic compounds of precious metals, isotopes, rare-earth metals, radioactive elements |
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Chapter 29 |
Organic chemicals |
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Chapter 30 |
Pharmaceutical Items |
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Chapter 31 |
Fertilisers |
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Chapter 32 |
Tanning or dyeing extracts, tannins and their derivatives, dyes, pigments, varnishes, paints, inks, etc. |
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Chapter 33 |
Essential oils/resinoids, perfumery, toilet/cosmetic preparations, |
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Chapter 34 |
Soap, washing preparations, organic surface-active agents, lubricating preparations, dental preparations and dental waxes with a basis of plaster, prepared waxes, artificial waxes, candles, modelling pastes, etc |
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Chapter 35 |
Albuminoidal substances, glues, enzymes, etc |
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Chapter 36 |
Explosives, pyrotechnic products, pyrophoric alloys, some specific combustible preparations |
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Chapter 37 |
Photographic/cinematographic goods |
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Chapter 38 |
Other miscellaneous chemical products |
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Section VII. Plastics, Rubber, and Articles Thereof |
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Chapter 39 |
Plastics/plastic articles |
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Chapter 40 |
Rubber/rubber articles |
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Section VIII. Raw Hides/Skins/Furskins and Articles Thereof, Leather, Related Goods |
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Chapter 41 |
Raw hides/skins (other than furskins), leather |
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Chapter 42 |
Articles manufactured of leather, travel goods, handbags, harnesses, articles made of animal gut (except silkworm gut) |
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Chapter 43 |
Furskins/artificial fur and similar articles |
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Section IX. Wood/Wooden Articles, Wood Charcoal, Cork/Articles of Cork, Basket Ware, Manufacturers of Straw, Other Plaiting Material etc |
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Chapter 44 |
Wood/wood charcoal/wooden articles |
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Chapter 45 |
Cork and articles of cork |
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Chapter 46 |
Manufactures of straw, esparto/other plaiting materials, basketware ware, etc |
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Section X. Pulp of Wood/Other Fibrous Cellulosic Material, Recovered Paper/Paperboard, and Articles Thereof |
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Chapter 47 |
Pulp of wood/other fibrous cellulosic material recovered paper or paperboard (scrap or waste) |
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Chapter 48 |
Paper/paperboard, articles made of paper pulp, etc |
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Chapter 49 |
Printed books, newspapers, and products of the printing industry, manuscripts, typescripts, etc |
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Section XI. Textile and Textile Articles |
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Chapter 50 |
Silk |
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Chapter 51 |
Wool, fine/coarse animal hair, horse hair yarn, etc |
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Chapter 52 |
Cotton |
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Chapter 53 |
Paper yarn, vegetable textile fibres, woven fabrics made of paper yarn |
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Chapter 54 |
Man-made filaments |
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Chapter 55 |
Man-made staple fibres |
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Chapter 56 |
Wadding, felt and nonwovens, cordage, twine, special yarns, ropes, etc |
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Chapter 57 |
Carpets and textile floor coverings |
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Chapter 58 |
Special woven fabrics, embroidery, tufted textile fabrics, trimmings, lace tapestries, |
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Chapter 59 |
Covered, laminated textile fabrics, coated, textile articles made for industrial use |
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Chapter 60 |
Knitted/crocheted fabrics |
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Chapter 61 |
Articles of apparel and clothing accessories that are knitted or crocheted |
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Chapter 62 |
Articles of apparel/clothing accessories that are not crocheted/knitted |
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Chapter 63 |
Other made-up textile articles, sets, worn clothing and textile articles, and rags |
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Section XII. Footwear, Umbrellas, Walking Sticks, Headgear, Seat Sticks, Whips, Artificial Flowers, Riding Crops, Articles of Human Hair, Prepared Feathers and Similar Articles |
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Chapter 64 |
Footwear, gaiters, and the parts of such articles |
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Chapter 65 |
Headgear and parts thereof |
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Chapter 66 |
Umbrellas and sun umbrellas, walking sticks, riding crops and parts thereof, whips, etc |
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Chapter 67 |
Prepared feathers and down and articles made thereof, articles made of human hair, artificial flowers |
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Section XIII. Articles Made of Stone, Plaster, Asbestos, Cement, Mica, Similar Materials, Glass/Glassware, Ceramic Products |
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Chapter 68 |
Articles made of stone, plaster, cement, asbestos, mica or similar materials |
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Chapter 69 |
Ceramic products |
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Chapter 70 |
Glass and glassware |
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Section XIV. Natural or Cultured Pearls, Precious Metals Clad With Precious Metal, Coins, Imitation Jewellery, Precious or Semi-Precious Stones |
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Chapter 71 |
Natural or cultured pearls, metals that are clad with precious metal and articles thereof, precious or semi-precious stones, imitation jewellery, coins |
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Section XV. Base Metal and Articles Made of Base Metal |
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Chapter 72 |
Iron and steel |
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Chapter 73 |
Articles made of iron/steel |
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Chapter 74 |
Copper and similar articles thereof |
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Chapter 75 |
Nickel and similar articles thereof |
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Chapter 76 |
Aluminium and similar articles thereof |
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Chapter 77 |
It is Reserved for possible future use |
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Chapter 78 |
Lead and articles thereof |
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Chapter 79 |
Zinc and articles thereof |
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Chapter 80 |
Tin and articles thereof |
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Chapter 81 |
Other base metals, cermets, etc |
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Chapter 82 |
Tools, cutlery of base metal, spoons and forks, implements, and parts thereof |
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Chapter 83 |
Miscellaneous articles made of base metal |
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Section XVI. Machinery and Mechanical Appliances, Sound Reproducers and Recorders, Electrical Equipment and Parts Thereof, Television Image and Sound Reproducers and Recorders |
|
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Chapter 84 |
Nuclear reactors, boilers, machinery and mechanical appliances, etc |
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Chapter 85 |
Electrical machinery and equipment, sound reproducers and recorders, sound reproducers and television image and recorders, etc |
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Section XVII. Aircraft, Vessels, Vehicles, Associated Transport Equipment |
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Chapter 86 |
Tramway/railway locomotives, tramway or railway track fixtures and fittings, rolling stock, mechanical (including electro-mechanical) traffic signalling equipment of all kinds |
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Chapter 87 |
Vehicles other than tramway/railway rolling stock, etc |
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Chapter 88 |
Aircraft, Spacecraft, its parts etc |
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Chapter 89 |
Floating structures, ships, boats |
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Section XVIII. Optical, Photographic, Cinematographic, Measuring, Precision, Medical/Surgical Instruments/Apparatus, Musical Instruments, Clocks/Watches, etc |
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Chapter 90 |
Optical, cinematographic, photographic, checking, precision, medical/surgical instruments/apparatus, etc |
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Chapter 91 |
Clocks and watches, its part etc |
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Chapter 92 |
Musical instruments, its parts etc |
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Section XIX. Arms and Ammunition, its accessories |
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Chapter 93 |
Arms and ammunition, etc |
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Section XX. Miscellaneous Manufactured Articles |
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Chapter 94 |
Furniture, mattresses, bedding, cushions and similar stuffed furnishing, lamps and fittings, which are not anywhere else included, illuminated signs and name-plates, etc |
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Chapter 95 |
Toys/games/sports requisites, etc |
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Chapter 96 |
Miscellaneous manufactured articles |
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Section XXI. Works of Art, Collectors’ Pieces/Antiques |
|
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Chapter 97 |
Works of art, antiques, collectors' pieces etc |
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Chapter 98 |
Project imports, laboratory chemicals, personal imports by air or post, ship stores, passenger's baggage |
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Chapter 99 |
Services |
SAC Code
SAC Code is a classification system for the services that are developed by the Service Tax Department of the country. Using the SAC code, the GST rates for services are fixed in five slabs, and they are: 0%, 5%, 12%, 18% and 28%. If the services are not exempted from GST or if the GST rates are not given, then the default GST rate for services of 18% would be applicable.
Where are the Codes Used?
For acknowledgement, estimation, and taxation, various utilities are often graded universally. Services Accounting Codes, or SACs, are codes for services. Animal products, mineral products, plastic articles, clothing, weapons and ammunition, and machinery all require an HSN code.
Importance of HSN under GST
HSN codes are used to make GST more standardized and globally accepted. HSN codes would eliminate the need to post a full product summary. Since GST returns are automatic, this will save time and make filing simpler. If a distributor or service provider’s turnover is in the above slabs, he or she must have an HSN/SAC-by-HSN/SAC report of transactions in his GSTR-1.