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About the application:

What is HSN Code in the first place? Harmonized System of Nomenclature, or HSN, was conceived and developed by the Globe Customs Organization (WCO) with the vision of classifying goods from all over the Globe in a systematic and logical manner. It is a six digit uniform code that classifies more than 5,000 products and is accepted worldwide. These set of defined guidelines is used for taxation purposes in identifying the rate of tax applicable to a product in a country. It is also used to determine the quantum of product exported or imported in and out of a country. It is a crucial feature to analyze the movement of goods across the Globe. It is a combination of various sections, further drilled down to chapters, which are further classified into headings and sub-headings. The resultant figure is the six-digit code. HSN is widespread and is adopted in more than 200 countries, covering a staggering 98% of goods in the Globe. It is by far, the best logical system of classification and identification adopted in International Trade. It has helped in reducing efforts and costs similar to complex procedures of International Trade. HSN in India Now that we have been through the concept of HSN, we now move on to understanding HSN from the Indian context. India is all set to have its very own Goods & Services Tax or GST, which applies to all goods and services alike. It shall subsume a lot of indirect taxes and reduce the burden on the end consumer. India has already been using HSN system since 1986 in the Central Excise and Customs regime. It is a much more detailed classification that added other two digits to the 6-digit structure. Indian manufacturers under GST shall be needed to follow a 3-tiered structure of HSN. Those with a turnover of less than INR 1.5 Crores need not follow HSN Those with a turnover exceeding INR 1.5 Crores but less than INR 5 Crores shall be using the 2 digit HSN codes Those with a turnover exceeding INR 5 Crores shall be using the 4 digit HSN codes Those dealers who are into imports or exports shall mandatory follow the 8 digit HSN codes