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Let’s discuss the meaning and need for Harmonized System of Nomenclature i.e. HSN codes under GST.
The entire world economy has been booming ever since the International Trade and Commerce came into picture due to the integration of the world economy. There are millions of products being traded around the world. In order to establish a uniform understanding of the product and establish a common language, irrespective of their national boundaries or language, HSN code was developed by WCO (World Customs Organization) for cross-border trading.
Hence, HSN codes came into the picture to define one article code in number for every product available around the world. Now HSN codes are an integral part of international trade and commerce.
Table of Contents
HSN codes under GST comprises about 5,000 product categories, and HSN is a six-digit code that defines around 5000 product categories, arranged in a legal and logical structure. It is supported by well-defined rules to achieve the uniform classification of products. The HSN code defines rules related to a taxation system in a country. It has also been used to measure that quantity of the product exported or imported from a country. HSN code helps in tracking the movement of goods around the world.
HSN has been adopted by more than 200 countries around the world, HSN code has been considered as the best logical tracking system for identification and classification of goods under domestic and international trade. Over 99 % of the merchandise in global trade is categorized in terms of the HSN code.
India has developed its own HSN code to implement with GST from 1st July 2017.
The Central Excise and Customs Department has been using the HSN Code regime for more than 20 years.
An Indian supplier Under GST has to Implement 3 HSN Structure:
HSN code is mandatory for all, except for those with a turnover of less than 1.5 Cr in a financial year and a taxpayer registered under the composition scheme.
Yes. HSN Codes are available on the Ministry’s website. They are controlled by the CBEC website.
The HSN code has vital implications for GST. This allows automation of GST returns, saving money and time for the tax authority. The HSN code also helps in determining the quantity of all items imported or traded.
For Online GST Registration or any GST related services, contact Enterslice.
Read our article:
Compliance Deadlines for Composition Taxpayers Relaxed
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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