How to find the HSN code

HSN Code is nothing but harmonized System Nomenclature. It is a six-digit code and is mainly used to classify a systematic collection of goods all over the world.

More than 20000 goods are traded using HSC codes all around the world.

Why is the HSN code needed?

Only with the help of HSN code search of particular products, GST complaints will be made with international standards and can ensure a proper levy of taxes.

There is very little chance of misinterpretations because of the logical classification of goods and products using the HSN code.

It simplifies the custom procedure and minimizes cost.

All GST payers will get to know about the tax they are paying for a particular product they have used.

Structure of HSN Code:

The structure of the HSN code followed in India consists of 8 digits in total. Below is the format of the HSN code of India.

63 10 85 12

1. The first two digits talked about which chapter the product belongs to of all the 99 chapters.

2. The next two digits indicate the specific heading the product falls under. There are 1244 headings under 99 chapters in total.

3. Totally, the number of subheadings is 5224 and the next two digits mention this.

4. The last two digits talk about the tariffs imposed on the products.

How to find HSN Code:

1. You can find the HSN code initially by searching the HSN chapter by name.

2. Filter the heading and subheading section to get the product code.

Application of HSN Code:

1. Businesses having a turnover of less than 1.5 crores need not apply for the Search HSN code.

2. Companies having a turnover of more than 1.5 crores and less than 5 crores should apply for a two-digit HSN code.

3. If the turnover is above 5 crores, they must apply for 4 digit HSN code.

4. For those who are involved in the import and export of products must apply for 8 digit code irrespective of their turnover.

Challenges:

There are several hurdles the government is facing in the implementation of GST with HSN code.

1. Some goods having the same HSN code come under different tax slabs thereby giving room for confusion.

2. Created a big dilemma between the business people. They were in oscillation whether to adopt the new method of GST using HSN codes.

3. Lack of knowledge about GST and unawareness amongst rural people is a big issue the government is facing nowadays.

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