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Income Tax efiling in India for FY 2023-24 (AY 2024-25)

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What is HSN ?

HSN code is reported as ā€œHarmonized System of Nomenclatureā€. The Ministry of Finance has announced that businesses having a turnover of Rs. 5 crores and above need to provide a six-digit HSN code for the invoices handed for the supplies of taxable goods and services. HSN code was firstly introduced in 1988 by the (WCO) World Customs Organization. HSN code was announced for the systematic classification of goods and services at both levels of national and international. HSN code has a six-digit number that helps to classify various products. HSN codes are applied to GST and customs. There is diversity in HSN codes for different commodities. HSN code is utilized in the whole world. India had accepted HSN codes to classify entities for customs from 1986. HSN codes made the process of filing GST returns very easy and handy.

What is the HSN code?

HSN code is reported as ā€œHarmonized System of Nomenclatureā€. The Ministry of Finance has announced that businesses having a turnover of Rs. 5 crores and above need to provide a six-digit HSN code for the invoices handed for the supplies of taxable goods and services. HSN code was firstly introduced in 1988 by the (WCO) World Customs Organization. HSN code was announced for the systematic classification of goods and services at both levels of national and international. HSN code has a six-digit number that helps to classify various products. HSN codes are applied to GST and customs. There is diversity in HSN codes for different commodities. HSN code is utilized in the whole world. India had accepted HSN codes to classify entities for customs from 1986. HSN codes made the process of filing GST returns very easy and handy.

How does HSN function?

HSN code was announced for the systematic classification of goods and services at both levels of national and international. HSN code has a six-digit number that helps to classify various products. HSN has more than Rs. 5,000 commodity groups and for each group, there is a six-digit number created for the identification of each commodity group. HSN code is structured by the securely defined rules for uniform classification.

What is the importance of HSN?

HSN code was constructed mainly for the classifications of goods and commodities in the whole world but in a systematic and well-structured way. HSN code has a six-digit number that helps to classify various products. HSN code has more than Rs.5,000 commodity groups for each group of commodities.

Apprehending the HSN code

HSN code is conveyed as ā€œHarmonized System of Nomenclatureā€. HSN code has a six-digit number and consists of 21 sections. These sections are divided into ninety-nine chapters having 1,244 headings and 5,224 subheadings. This systematic classification of goods and services made the GST very simple. ā€œHarmonized System of Nomenclatureā€ (HSN) codes of 6 numbers are common worldwide. Headings and subheadings show the description of the products meticulously and chapters along with sections present the comprehensive classifications of goods.

Who needs to use it?

It is an integral part of the classification of goods so all those manufacturers, exporters, and importers should take HSN codes in use. Many exporters and importers are documenting these codes. Retailers and dealers would be especially utilizing ā€œHarmonized System of Nomenclatureā€ (HSN) codes that are already provisioned in the invoices of manufacturer or importer suppliers. Dealers and retailers with a turnover of less than Rs. 1.5 crore does not need to take HSN codes for entities.

Frequently asked questions

HSN code is also narrated as ā€œHarmonized System of Nomenclatureā€. HSN code has a six-digit number that helps to classify various products. HSN codes are applied to GST and customs. HSN code was constructed mainly for the classifications of goods and commodities in the whole world but in a systematic and well-structured way.

No. Only those registered taxpayers, Dealers, and retailers having a turnover of more than Rs 1.5 crore in the initial fiscal year are required to provide 6- digit HSN code-based invoices.

HSN code has a six-digit universality for the classifications of goods and commodities in the whole world.

The difference between the HSN code and SAC is that SAC is to identify services but the HSN code is used to identify goods.

It is an integral part of the classification of goods so all those manufacturers, exporters, and importers should take HSN codes in use. HSN code is structured by the securely defined rules for uniform classification.

Not all businesses have to get an HSN code but those registered taxpayers, Dealers, and retailers with a turnover of more than Rs. 1.5 crore in the initial fiscal year is required to provide a six-digit HSN code.

To find the HSN code, Firstly, you have to select the chapter based on section and subheadings, and you will get the product HSN code. For example- If the HSN code for Apple is 93849360. In this code, the chapter is 93, a section is 84, and 93 is the subheading so the product (Apple) would be identified by the number 60.

UQC is denoted as a unique quantity code. However, UQC is a unit of measurement. For example 1 liter of milk or 4 kg flour etc.

The objective of HSN code regulations is to assemble GST globally accepted. With the help of HSN codes, you donā€™t need to upload a precise description of the goods. It preserves your precious time and energy.

The foremost two digits of the HSN codes describe the HSN code chapter and the heading of the product is represented in the third and fourth digit of the HSN code along with the sub-heading is defined in the fifth and sixth digit of the HSN code.
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