1. What is HSN code Under GST?
HSN stands for Harmonized System of Nomenclature which was developed by the World Customs Organization (WCO) with the vision of classifying goods all over the World in a systematic manner.
2. The Usage Of HSN Code for GST
- The HSN code under GST of six digit forming an uniform code helps in classifying over 5,000 products and is accepted worldwide
- The GST HSN helps in taxation purposes in identifying the HSN code wise GST rate applicable to a product in a country
- The HSN code under GST is also used to determine the quantum of item traded or imported all through a nation
3. HSN Code For GST India
HSN has been applicable in India after implementation of GST. India has already been using HSN system in the Central Excise and Customs regime.
But the GST HSN is a much more detailed classification that adds another two digits to the 6-digit structure. For certain categories of person in GST, there is even an requirement to mention HSN code with GST rate in the tax invoices prepared by them.
4. Provisions Related to HSN Code for GST India
- Small taxpayers with annual turnover up to Rs 1.50 crores in preceding financial year need not be required to mention HSN code wise GST rate in their tax invoice
- Taxpayers having turnover exceeding Rs. 1.5 crore but up to 5.00 crore will be required to mention only two digits of GST HSN
- All those taxpayers having turnover exceeding Rs 5 Crore will be required to mention four digits of GST HSN
5. Structure Of GST HSN Code
Structure: The coding process of a commodity is organized logically by economic activity or component material. For example, animals and animal products are found in one section of the HS, while machinery and mechanical appliances are found in another. The HSN book for referring to an HSN Code for a product is organized into following, by which one can make an quick reference to the HSN Code for product he is searching for:
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6. GST HSN Code Search
- How do I carry out a GST HSN Code Search?
- You will need a GST rate finder tool to find the HSN code for the given product
- There are other ways also to decode HSN code for a given product such as by visiting Central Board or excise and customs department website and other third party apps on play store and iOS platform
- Why do I need a GST rate finder?
- Indian Taxation System has categorized over 1211 goods for levy of GST under 6 broad categories or tax-slabs
- These are 0% or No Tax, 5%, 12%, 18% and 28%
So it becomes important to know in which of these categories your product or good has been classified. And one can easily find that with a search using commonly used word for the product.
So the Rate Finder Tool is used to find the HSN Code for the goods or products for invoicing purposes.