HSN Code or Harmonized System Nomenclature code is an internally adopted commodity description which is required while GST filing. Here you will learn what GST HSN code and SAC code are and where you can find the HSN Code list.
HSN Code under GST stands for Harmonized System Nomenclature code. It is an internationally adopted commodity description and was developed by the World Customs Organization (WCO) in 1988. harmonized system nomenclature Code is used and adopted by 200+ countries. Presently, the code classifies over 98% of the merchandise in the international market and trade.
The HSN Code list is classified as follows:
Sections: Every section is dedicated towards different category, i.e. Live Animal and animal products, vegetable products, animal and vegetable fat oils, etc. There are 21 sections in the HSN code in total.
Chapters: Chapters further categorise the sections. For instance, live animals, meat and edible meat offal, fish and crustaceans, dairy products, and products of animal origin come under the first section of Live Animal and Animal Products. Also, each chapter contains the HSN code for the product. There are about 99 chapters in the HSN code.
You can find the HSN code list for GST in India here.
What is HSN Code in GST?
Let us provide you answer to what is HSN Code under GST.
Since the harmonized system nomenclature code classifies the goods on an international level, the Indian government decided to adopt the same method for an easy classification of goods and products under GST. GST HSN code makes the entire process of levying GST easy and hassle-free.
What is HSN SAC Code?
As harmonized system nomenclature code is for the commodities under the GST, SAC (Service Accounting Codes) code is for the services. India has adopted the SAC for all the services and covers them at a national level. The GST rates for services are in five slabs, 0%, 5%, 12%, 18%, and 28%. In case the services are not mentioned in the GST, the default GST rate will be applicable.
Find the complete SAC code list here.
Is HSN Code Mandatory?
Also Read: GST Registration Process
Businessmen having a turnover of less than 1.50 crore does not require to fill the harmonized system nomenclature Code in the GSTR-1 (Table-12). The taxpayers having an annual turnover between INR 1.50 to 5 crores are required to specify the 2-digit harmonized system nomenclature code. While for taxpayers with a turnover of more than INR 5 crores are required to specify 4-digit harmonized system nomenclature code for the goods. However, an eight-digit harmonized system nomenclature code is mandatory in case of importing and exporting goods.
What are the Benefits of HSN Code?
Specifying the goods under an internationally accepted harmonized system nomenclature code makes their identification easy and reduces the chances of any misinterpretation. Also, if the businessman fills the harmonized system nomenclature code in the supply of goods and offerings, there is no need to enter the description of the goods and services while filing GST returns.
HSN or harmonized system nomenclature code provides a uniform classification of goods and offerings on the national as well as the international level. Both the HSN and SAC codes are available on the ministry’s website.