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HSN Code Finder
Find accurate GST product codes instantly with our HSN Code Finder. Search by product name, get updated HSN details, and simplify GST filing with confidence today.
HSN Code - Overview
The HSN Code (Harmonized System of Nomenclature) is an internationally standardized system for classifying goods. It was developed by the World Customs Organization (WCO) and is used by more than 200 countries worldwide.
Each HSN code represents a specific category of goods. These codes help governments and businesses identify products uniformly for taxation, customs duties, and trade statistics.
In India, HSN codes are used under GST to:
- Identify goods clearly
- Determine applicable GST rates
- Ensure uniform tax reporting
- Reduce classification disputes
Purpose and Importance of HSN Code
The Harmonized System Nomenclature (HSN) Code is an internationally standardized system developed by the World Customs Organization (WCO) for the classification of goods. The primary objective of the HSN Code is to facilitate the smooth and uniform classification of products across countries, which helps in ensuring consistent and transparent trade practices globally.
Structure of HSN Code
India has a HSN code with 8 digits.
For instance:
The HSN code for handkerchiefs made of textile materials is 62.13.90.10.
Here the first two digits (62) represent the chapter number for articles of apparel and clothing accessories that are not knitted or crocheted.
The next two digits (13) are the heading number for handkerchiefs.
The next two digits (90) are the product code for handkerchiefs made of textile materials.
The last two digits (10) are added for more classification and represent the tariff items. It might indicate if the handkerchiefs are made from man-made fiber.
The HSN code structure also represents the following:
| Chapter | Header | Subheading | Tariff item |
|---|---|---|---|
| 62 | 13 | 19 | 10 |
Declaration of HSN Code for Goods and Services
From April 2021 on, mentioning HSN codes for goods and using SAC codes for services was mandated by the Indian government. Based on the transaction charges, the total number of HSN codes to be declared varies. Here is a clear outline for the same.
| Transaction Charges | Type of Inovice document | No.of digits of HSN to be declared |
|---|---|---|
| Up to ₹5 crore | Mandatory for B2B tax invoices | 4 |
| Optional for B2C tax invoices | 4 | |
| More than ₹5 crore | Mandatory for all invoices | 6 |
All of the HSN codes should be declared in every tax invoice issued by the taxpayer. If the taxpayer is involved in exports and imports under the GST, then all eight digits of the HSN code have to be declared.
Why is the HSN code required?
The HSN code is mandatory for GSTR forms. HSN codes provide clarity on GST rates for specific products, benefiting taxpayers. It is mandatory to mention the HSN number in the following cases:
- 6-digit codes for turnover above ₹5 crores
- 4-digit for B2B supplies up to ₹5 crores
- Optional for turnover below ₹1.5 crores.
Steps to Search HSN/SAC Tax Rates
You can easily find out the corresponding GST rates for your products using our HSN code finder in three easy steps:
- Access the HSN code finder and enter the HSN code or the SAC code in the provided search bar
- Click the search button and the results will be displayed immediately
- Towards the right end corner of the results you can find the corresponding GST rate for particular services or goods.
Services Accounting Code (SAC) in GST
Service Accounting Code or SAC are codes associated with services. Just like HSN codes are for goods and SAC is for services provided. These codes are issued directly by the Central board of indirect tax and are used to classify each and every service. It is crucial to mention SAC while generating invoices for service related transactions.
SAC code has 6 digits and is covered under chapter 99. All the SAC codes start with 99. Subsequently the four digits explains the nature of the service. For better understanding let us look at an example:
SAC code has 6 digits and is covered under chapter 99. All the SAC codes start with 99. Subsequently the four digits explains the nature of the service. For better understanding let us look at an example:
995431 is the SAC code for demolition services.
- From the code the first two letters (99) represents the chapter and is common to all the SAC codes
- The next two numbers (54) represents the heading of the major service category
- The last two numbers (31) represent the service code of the specific nature of the service.
Difference Between HSN Code and SAC Code
While HSN codes are for goods, SAC (Services Accounting Code) is used for services.
| Feature | HSN Code | SAC Code |
|---|---|---|
| Used for | Goods | Services |
| Governing body | WCO | GST Council |
| Format | Numeric | Numeric |
| GST usage | Mandatory | Mandatory |
An HSN Code Finder focuses specifically on goods classification, not services.
Importance of HSN Code in Different Sectors
HSN Code in Import and Export
HSN Codes streamline the import and export process by providing a consistent classification system for goods. This helps in determining the correct duties and compliance requirements, thus facilitating smoother international trade operations.
HSN Code in Manufacturing
Manufacturers use HSN Codes to classify raw materials and finished products. This classification helps in ensuring compliance with tax regulations and aids in inventory management, cost calculation, and supply chain management.
HSN Code in Retail and Wholesale
Retailers and wholesalers rely on HSN Codes to classify their inventory accurately. This classification is crucial for determining the correct tax rates, managing inventory efficiently, and ensuring compliance with tax regulations.
HSN Code and Taxation and under GST
Role of HSN Code in GST
HSN Codes play a critical role in the GST system by helping to identify the correct tax rates applicable to various goods. This classification ensures accurate tax collection and compliance with GST regulations, thus reducing the chances of tax evasion and disputes.
Impact of HSN Code on GST Rates
The GST rates for goods are determined based on their HSN Codes. Therefore, using the correct HSN Code is essential to avoid over or under-taxation. Accurate classification helps in maintaining consistency and transparency in the tax system.
HSN Code and Customs Duty
How HSN Code Affects Customs Duty
HSN Codes determine the customs duty rates applicable to imported and exported goods. This classification impacts the overall cost of trade, as the correct duty rates are applied based on the HSN Code of the goods.
Exemptions and Concessions Based on HSN Code
Certain goods classified under specific HSN Codes may be eligible for duty exemptions or concessions. These benefits can significantly impact the trade value of the goods and provide cost advantages to businesses.
HSN codes are the foundation of goods classification under GST and global trade. Selecting the correct code is not just a compliance requirement but a business necessity. With thousands of product categories, manual classification is time-consuming and error-prone.
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