What is HSN code in GST
- HSN (Harmonised System of Nomenclature) is a multipurpose international product nomenclature developed by the World Customs Organization (WCO).
- In India; HSN coding is currently used under Excise, Customs, and state Value Added Tax (VAT) laws and is now also be used under Goods and Services Tax (GST) law, for classification of products/goods.
- It includes around 5,000 commodity groups; each recognized by a six digit code, organized in a legal and logical structure and is supported by well-defined rules to achieve uniform classification.
- The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics.
- More than 98 % of the merchandise in international trade is arranged in terms of the HS.
- The HS contributes to the harmonization of Customs and trade procedures, and the non-documentary trade data interchange in connection with such procedures, thus reducing the costs related to international trade.
- Codes under GST Under Goods and Service Tax law, the HSN code to be utilized by a taxable individual for classification of goods will be based on the taxpayer’s turnover.
- The HSN code needs to be declared on the tax invoice and also to be reported while filing the GST returns.