HSN Code List & GST Rate Finder

What is HSN Code?

HSN code stands for “Harmonized System of Nomenclature”. This system has been introduced for the systematic classification of goods all over the world. HSN code is a 6-digit uniform code that classifies 5000+ products and is accepted worldwide. It was developed by the World Customs Organization (WCO) and it came into effect from 1988.

How does HSN code work?

It has about 5,000 commodity groups, each identified by a six-digit code, arranged in a legal and logical structure. It is supported by well-defined rules to achieve uniform classification.

Why is HSN important?

The main purpose of HSN is to classify goods from all over the World in a systematic and logical manner. This brings in a uniform classification of goods and facilitates international trade

HSN Worldwide

The HSN system is used by more than 200 countries and economies for reasons such as:

• Uniform classification
• Base for their Customs tariffs
• Collection of international trade statistics

Over 98% of the merchandise in international trade is classified in terms of the HSN.

Harmonized System of Nomenclature number for each commodity is accepted by most of the countries. The HSN number remains same for almost all goods. However, HSN number used in some of the countries varies little, based on the nature of goods classified.

HSN in India

India is a member of World Customs Organization(WCO) since 1971. It was originally using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central Excise added two more digits to make the codes more precise, resulting in an 8 digit classification.

Understanding the HSN Code

The HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and 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.

For example:

Handkerchiefs made of Textile matters 62.13.90

• First two digits (62) represent the chapter number for Articles of apparel and clothing accessories, not knitted or crocheted.
• Next two digits (13) represent the heading number for handkerchiefs.
• Finally, last two digits (90) is the product code for handkerchiefs made of other textile materials.

India has 2 more digits for a deeper classification.If the handkerchiefs are made from a man-made fibre, then the HSN code is 62.13.90.10.

Structure of HSN Code in India

Services Accounting Code (SAC) in GST

Like goods, services are also classified uniformly for recognition, measurement and taxation. Codes for services are called Services Accounting Code or SAC

For example:

Legal documentation and certification services concerning patents, copyrights and other intellectual property rights-- 998213

• The first two digits are same for all services i.e. 99
• The next two digits (82) represent the major nature of service, in this case, legal services
• The last two digits (13) represent detailed nature of service, i.e., legal documentation for patents etc.

HSN in GST

HSN codes to be declared up to 31st March 2021:

Declaration of HSN Code for Goods and Services

HSN codes to be declared from 1st April 2021:

(Vide CGST notification number 78/2020 dated 15th October 2020)

*Annual aggregate turnover for the previous financial year, i.e., for reporting invoice in FY 2021-22, turnover to be referred must be of FY 2020-21.

• These HSN codes must be declared in every tax invoice issued by the taxpayer under GST.
• All 8 digits of HSN code is mandatory in case of export and imports under the GST.

Why is HSN important under GST?

The purpose of HSN codes is to make GST systematic and globally accepted.

HSN codes will remove the need to upload the detailed description of the goods. This will save time and make filing easier since GST returns are automated.

A dealer or a service provider must provide HSN/SAC wise summary of sales in his GSTR-1 if his turnover falls in above slabs.

HSN - wise summary of outward supplies

Chapter wise distribution of goods using HSN codes

How can I find my product in HSN list and its relevant HSN Code?

What is UQC?

UQC stands for Unique Quantity Code. In simple terms, it is a unit of measurement such as 1 kilogramme of wheat, 1 litre of oil etc.

What is UQC in GST?

As per CGST Rules, any tax invoice, credit note, debit note must have UQC or quantity unit description.

For example-

100 metres of fabric

Refer our article on

UQC for more information.

To minimize errors while filing GST returns, it’s important to know the right HSN code for your product.

Use ClearTax HSN Calculator to find out the HSN code for your product. Our ClearTax GST Software has all the HSN codes inbuilt. You need to select the items you sell only once in the Item Master. Once you are done, your HSN code will be automatically populated in all your invoices and returns.

Simplify your GST Filing Process with ClearTax GST Software.

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