How Does GST HSN Code List work Archives

A Complete guide on "The 8-Digit HSN Code is the Key to Understanding GST Rates" Introduction Awareness of GST rates requires an understanding of the 8-digit HSN code. It is a system of classification and identification for goods and services. Businesses and government organizations use this code to make sure that the proper GST rate is applied to products and services. The code is also used to evaluate whether certain GST exclusions and advantages are applicable to particular goods and services. Here is a detailed explanation of The 8-Digit HSN Code in GST. What is the HSN code? The term “HSN code” stands for Harmonized System of Nomenclature code. As a multipurpose international product nomenclature, the World Customs Organization (WCO) initially proposed a unique code for all goods intending to apply the classification of goods all over the world uniformly. India began using HSN codes in 1986 to categorize goods and items for Customs and Central Excise tariff duty. GST invoices use the same HSN tariff numbers for Customs. What is the HSN code in GST? The HSN starts with a 6-digit code. The Customs and Central Excise authorities inserted 2 additional numbers for clarity purposes. The defined HSN code has a total of 8 digits. The GST chapter number is shown by the first two digits. The chapter headings are indicated by the next two digits. The following two digits denote a subheading, and the last two digits denote a further subheading. The classification of the goods in the HSN code is done under 21 sections, 99 chapters, 1244 headings, and 5224 subheadings. How Does GST HSN Code List work? The GST HSN Code is mainly used by traders and dealers, there are different types of HSN codes such as 2-digit codes, 4-digit codes, and 8-digit codes. Dealers/ traders can select any of the given codes based on their business activity. The GST HSN Code List works like-: Business Turnover Limit Requirement for HSN Code Turnover is not more than INR 1.5CR No need for HSN Code If in between INR 1.5CR to INR 5CR Then there is a requirement for 2 digit HSN Code for business activity Turnover is more than 5CR There is a need to opt for a 4-digit HSN Code for trading/business activity In the case of international trading and import-export business Need for 8-digit HSN Code for business activity How is the GST Rate listed with the 8-digit HSN Code? The product listing relies mainly on the 8-digit HSN code lists with GST rates. The understanding of the tariff or duty is made simpler by these codes for both buyers and sellers. The eight-digit HSN code lists with GST rates are generally divided into six categories: clothing, footwear, textiles, home furnishings, furniture, and toys. Conclusion In conclusion, the 8-digit HSN code is a special identification number that can be used to determine a variety of information about a product, including its GST rate. Each HSN code for a product is unique. The World Customs Organization is responsible for developing the HSN (Harmonized System of Nomenclature). All of the nations that are under the WCO have similar HS codes. The first two digits identify the nation in which it was produced. The following six give precise codes for each sort of good.