What is HSN Code ?: HSN stands for Harmonized System of Nomenclature. It’s a system created by the World Customs Organization (WCO) to give every product a unique number. This helps countries all over the world classify goods in the same way.
Think of it like a universal language for products — whether you’re selling rice, clothes, or mobile phones, the HSN code tells exactly what the item is.
How Does the HSN Code Work ?
The code is usually 6 to 8 digits long:
- First 2 digits → Main category (called Chapter)
- Next 2 digits → Sub-category (Heading)
- Next 2 digits → More details (Sub-heading)
- Extra 2 digits (in India) → Even finer details for GST
👉 Example: HSN Code 10063020 = a type of rice (semi-milled or polished).
Why is HSN Code Important?
- ✅ Makes trade easier between countries
- ✅ Helps decide the correct GST tax rate
- ✅ Avoids confusion at customs
- ✅ Reduces mistakes in invoices and returns
Also Read:
HSN Code in India (under GST)
In India, HSN codes are used on invoices:
- Businesses with turnover up to ₹5 crore → Use 4-digit HSN
- Businesses with turnover above ₹5 crore → Use 6-digit HSN
For services, a different system called SAC (Services Accounting Code) is used.
Common HSN Code Examples
| Product | HSN Code |
|---|---|
| Rice | 1006 |
| Wheat | 1001 |
| Cotton Fabrics | 5208 |
| Mobile Phones | 8517 |
| Computers | 8471 |
FAQ’s
Q: How many digits are there in an HSN Code?
Ans: An HSN Code can have 4, 6, or 8 digits, depending on the level of classification required:
4 digits: For smaller businesses (turnover up to ₹1.5 crore)
6 digits: For larger businesses and exports
8 digits: For international trade
Q: Why is the HSN Code important?
Ans: The HSN Code ensures uniform classification of goods across India and globally. It helps in simplifying taxation, filing GST returns, and reducing discrepancies in product identification.
Q: What is an HSN Code?
Ans: HSN (Harmonized System of Nomenclature) Code is a standardized international system for classifying goods. It helps in identifying the nature of products for taxation and trade purposes under the GST system.
2 thoughts on “What is HSN Code ?”