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30 Jun, 2025
By Online Legal India
Published On 01 Sep 2022
Updated On 13 Jun 2025
Category GST
In India's Goods and Services Tax framework, the Harmonized System of Nomenclature code plays a pivotal role in classifying goods systematically. By assigning specific codes to products, HSN ensures uniformity in tax rates across the nation, facilitating smoother trade and compliance. This article delves into the significance of GST HSN codes, their structure, and their impact on businesses, providing clarity for seamless GST implementation.
The Harmonized System of Nomenclature (HSN) code is an internationally standardized system developed by the World Customs Organization to classify traded products systematically. Introduced in 1988, the HSN code comprises a six-digit code that categorizes goods based on their nature and characteristics, facilitating uniform classification across over 200 countries.
India has been a member of the WCO since 1971, adopted the HSN system to streamline its taxation processes. Initially employing six-digit codes for Customs and Central Excise duties, India later expanded to an eight-digit classification to achieve more precise categorization. With the implementation of the Goods and Services Tax, HSN codes became integral in determining applicable tax rates for various goods. This ensures consistency and transparency in tax administration.
The adoption of HSN codes in India not only simplifies domestic tax processes but also aligns the country with global trade standards. It promotes efficiency in international trade and compliance with global customs procedures.
The Harmonized System of Nomenclature code is a globally recognized classification system developed by the World Customs Organization to standardize the identification of goods in international trade. India adopted the HSN system to streamline its taxation processes, particularly under the Goods and Services Tax regime. The HSN code structure is hierarchical and consists of the following levels:
GST HSN codes are essential for businesses operating under India's GST framework. They offer several key benefits that enhance efficiency and compliance:
HSN codes ensure that goods are correctly classified, which leads to the application of appropriate GST rates. This accuracy minimizes errors in tax computation and helps businesses avoid penalties.
Businesses can automate and simplify the process of filing GST return by using standardized codes. This reduces the need for detailed product descriptions and speeds up the filing process.
Proper use of GST HSN codes aids in maintaining compliance with GST regulations. It reduces the risk of audits and legal issues by providing clear documentation of goods and their tax classifications.
Since HSN codes are internationally recognized, they simplify cross-border trade by providing a common language for classifying goods, thus easing customs procedures.
Assigning HSN codes to products allows for better tracking and organization of inventory. This leads to more efficient stock management and reporting.
Incorporating HSN codes into business operations not only ensures compliance with GST laws but also enhances overall operational efficiency and facilitates smoother domestic and international trade.
Under India's Goods and Services Tax framework, the requirement to mention Harmonized System of Nomenclature codes on invoices are based on a business's aggregate annual turnover:
These requirements ensure standardized classification of goods, facilitating accurate tax computation and compliance. For businesses engaged in import or export, an 8-digit HSN code is mandatory to align with international trade practices.
To accurately determine the HSN code for your products under the Goods and Services Tax regime in India, consider the following approaches:
Access the official GST portal and navigate to the 'Search HSN/SAC Code' option under the 'User Services' section. Here, you can input your product's name or description to find the corresponding HSN code.
The Central Board of Indirect Taxes and Customs provides comprehensive GST rate schedules, listing goods and their associated HSN codes. Reviewing these schedules can help you identify the correct code for your product.
If you are uncertain about the appropriate HSN code for your product, it is advisable to seek guidance from a qualified tax consultant or chartered accountant. They can provide expert advice to ensure accurate classification and compliance.
| HSN Code | Description | GST Rates (%) |
|---|---|---|
| HSN Code Chapter 1 | Live animals | 5% |
| HSN Code Chapter 2 | Meat and edible meat offal | 5% |
| HSN Code Chapter 3 | Fish and crustaceans, molluscs and other aquatic invertebrates | 5% |
| HSN Code Chapter 4 | Dairy produce; birds' eggs; natural honey; edible products of animal origin | 5% |
| HSN Code Chapter 5 | Products of animal origin, not elsewhere specified or included | 5% |
| HSN Code Chapter 6 | Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage | 5% |
| HSN Code Chapter 7 | Edible vegetables and certain roots and tubers | 5% |
| HSN Code Chapter 8 | Edible fruit and nuts; peel of citrus fruit or melons | 5% |
| HSN Code Chapter 9 | Coffee, tea, mate and spices | 5% |
| HSN Code Chapter 10 | Cereals | 0% |
| HSN Code Chapter 11 | Products of the milling industry; malt; starches; inulin; wheat gluten | 5% |
| HSN Code Chapter 12 | Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder | 5% |
| HSN Code Chapter 13 | Lac; gums, resins and other vegetable saps and extracts | 5% |
| HSN Code Chapter 14 | Vegetable plaiting materials; vegetable products not elsewhere specified or included | 5% |
| HSN Code Chapter 15 | Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes | 5% |
| HSN Code Chapter 16 | Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates | 12% |
| HSN Code Chapter 17 | Sugars and sugar confectionery | 5% |
| HSN Code Chapter 18 | Cocoa and cocoa preparations | 18% |
| HSN Code Chapter 19 | Preparations of cereals, flour, starch or milk; pastrycooks' products | 5% / 12% |
| HSN Code Chapter 20 | Preparations of vegetables, fruit, nuts or other parts of plants | 12% |
| HSN Code Chapter 21 | Miscellaneous edible preparations | 18% |
| HSN Code Chapter 22 | Beverages, spirits and vinegar | 18% / 28% |
| HSN Code Chapter 23 | Residues and waste from the food industries; prepared animal fodder | 5% |
| HSN Code Chapter 24 | Tobacco and manufactured tobacco substitutes | 28% + Cess |
| HSN Code Chapter 25 | Salt; sulphur; earths and stone; plastering materials, lime and cement | 5% / 18% |
| HSN Code Chapter 26 | Ores, slag and ash | 5% |
| HSN Code Chapter 27 | Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes | 5% / 18% / 28% |
| HSN Code Chapter 28 | Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes | 18% |
| HSN Code Chapter 29 | Organic chemicals | 18% |
| HSN Code Chapter 30 | Pharmaceutical products | 5% / 12% |
| HSN Code Chapter 31 | Fertilisers | 5% |
| HSN Code Chapter 32 | STanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks | 18% |
| HSN Code Chapter 33 | Essential oils and resinoids; perfumery, cosmetic or toilet preparations | 18% |
| HSN Code Chapter 34 | Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, "dental waxes" and dental preparations with a basis of plaster | 18% |
| HSN Code Chapter 35 | Albuminoidal substances; modified starches; glues; enzymes | 18% |
| HSN Code Chapter 36 | Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations | 18% |
| HSN Code Chapter 37 | Photographic or cinematographic goods | 18% |
| HSN Code Chapter 38 | Miscellaneous chemical productsA | 18% |
| HSN Code Chapter 39 | Plastics and articles thereof | 18% |
| HSN Code Chapter 40 | Rubber and articles thereof | 18% |
| HSN Code Chapter 41 | Raw hides and skins (other than furskins) and leather | 5% / 12% |
| HSN Code Chapter 42 | Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut) | 18% |
| HSN Code Chapter 43 | Furskins and artificial fur; manufactures thereof | 18% |
| HSN Code Chapter 44 | Wood and articles of wood; wood charcoal | 5% / 12% / 18% |
| HSN Code Chapter 45 | Cork and articles of cork | 18% |
| HSN Code Chapter 46 | Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork | 12% |
| HSN Code Chapter 47 | Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard | 5% |
| HSN Code Chapter 48 | Paper and paperboard; articles of paper pulp, of paper or of paperboard | 12% / 18% |
| HSN Code Chapter 49 | Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans | 0% / 12% |
| HSN Code Chapter 50 | Silk | 5% |
| HSN Code Chapter 51 | Wool, fine or coarse animal hair; horsehair yarn and woven fabric | 5% |
| HSN Code Chapter 52 | Cotton | 5% |
| HSN Code Chapter 53 | Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn | 5% |
| HSN Code Chapter 54 | Man-made filaments | 5% / 12% |
| HSN Code Chapter 55 | Man-made staple fibres | 5% / 12% |
| HSN Code Chapter 56 | Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof | 5% / 12% |
| HSN Code Chapter 57 | Carpets and other textile floor coverings | 12% |
| HSN Code Chapter 58 | Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery | 12% |
| HSN Code Chapter 59 | Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use | 12% |
| HSN Code Chapter 60 | Knitted or crocheted fabrics | 5% / 12% |
| HSN Code Chapter 61 | Articles of apparel and clothing accessories, knitted or crocheted | 5% / 12% |
| HSN Code Chapter 62 | Articles of apparel and clothing accessories, not knitted or crocheted | 5% / 12% |
| HSN Code Chapter 63 | Other made up textile articles; sets; worn clothing and worn textile articles; rags | 5% / 12% |
| HSN Code Chapter 64 | Footwear, gaiters and the like; parts of such articles | 5% / 18% |
| HSN Code Chapter 65 | Headgear and parts thereof | 12% / 18% |
| HSN Code Chapter 66 | Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof | 12% / 18% |
| HSN Code Chapter 67 | Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair | 12% / 18% |
| HSN Code Chapter 68 | Articles of stone, plaster, cement, asbestos, mica or similar materials | 12% / 18% |
| HSN Code Chapter 69 | Ceramic products | 12% / 18% |
| HSN Code Chapter 70 | Glass and glassware | 12% / 18% |
| HSN Code Chapter 71 | Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewellery; coin | 3% / 12% / 18% |
| HSN Code Chapter 72 | Iron and steel | 18% |
| HSN Code Chapter 73 | Articles of iron or steel | 18% |
| HSN Code Chapter 74 | Copper and articles thereof | 18% |
| HSN Code Chapter 75 | Nickel and articles thereof | 18% |
| HSN Code Chapter 76 | Aluminium and articles thereof | 18% |
| HSN Code Chapter 77 | (Reserved for possible future use) | - |
| HSN Code Chapter 78 | Lead and articles thereof | 18% |
| HSN Code Chapter 79 | Zinc and articles thereof | 18% |
| HSN Code Chapter 80 | Tin and articles thereof | 18% |
| HSN Code Chapter 81 | Other base metals; cermets; articles thereof | 18% |
| HSN Code Chapter 82 | Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal | 18% |
| HSN Code Chapter 83 | Miscellaneous articles of base metal | 18% |
| HSN Code Chapter 84 | Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof | 18% |
| HSN Code Chapter 85 | Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles | 18% |
| HSN Code Chapter 86 | Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds | 5% / 18% |
| HSN Code Chapter 87 | Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof | 28% |
| HSN Code Chapter 88 | Aircraft, spacecraft | - |
Using the correct HSN codes is essential for accurate GST compliance in India. Here are common mistakes businesses make regarding HSN codes and how to avoid them:
Assigning an incorrect Harmonized System of Nomenclature code to a product can lead to several complications in Goods and Services Tax compliance. Firstly, it may result in the application of incorrect GST rates, leading to tax mismatches and potential disputes with tax authorities. Such discrepancies can cause delays in processing GST returns and may attract penalties.
Moreover, errors in HSN codes can complicate the GSTR-1 return process, potentially leading to backlogs and delays in refunds, thereby affecting the company's cash flow. To mitigate these risks, businesses should utilize the official GST Portal's HSN Code Finder or consult with tax professionals to ensure accurate classification of goods. Regularly updating knowledge on HSN code classifications and adhering to the prescribed formats are essential steps in maintaining compliance and avoiding unnecessary financial and legal complications.
Harmonized System of Nomenclature codes and Goods and Services Tax rates are subject to periodic updates by the Central Board of Indirect Taxes and Customs. Failing to stay informed about these changes can lead to several issues for businesses.
Applying outdated tax rates may result in overpayment or underpayment of taxes, which can lead to financial discrepancies. Additionally, using obsolete HSN codes can violate GST regulations, potentially attracting penalties and complicating compliance processes.
To ensure accurate tax filings and maintain compliance, businesses should regularly check for updates on the CBIC's official GST Goods and Services Rates page. Staying updated with the latest HSN code classifications and GST rates is crucial for seamless business operations and adherence to tax laws.
Under India's GST regulations, businesses must include HSN codes on invoices, with requirements varying based on turnover.
For businesses with an annual turnover up to Rs.5 crore, it is mandatory to mention 4-digit HSN codes on B2B invoices. For those exceeding Rs.5 crore, 6-digit HSN codes are required on all invoices, which include both B2B and B2C transactions.
These mandates, effective from April 1, 2021, aim to enhance tax compliance and standardize product classification. To ensure compliance, businesses should regularly consult official GST resources and update their invoicing systems accordingly.
Misreporting or omitting HSN codes in GST filings can lead to significant penalties under Indian tax laws. According to Section 125 of the CGST Act, a general penalty of up to Rs.25,000 may be imposed for offenses where no specific penalty is prescribed. Specifically, failing to mention or incorrectly reporting HSN codes can attract a penalty of Rs.50,000, comprising Rs.25,000 each under CGST and SGST.
Additionally, if such misreporting leads to tax evasion, the penalty can be Rs.10,000 or the amount of tax evaded, whichever is higher. To avoid these penalties, businesses should ensure accurate reporting of HSN codes in their invoices and GST returns. Regularly consulting the official GST portal and seeking advice from tax professionals can help maintain compliance and prevent potential fines.
Ensuring accurate HSN code usage is vital for GST compliance. Here are some best practices to help businesses maintain compliance:
Educate employees involved in billing, finance, and operations about the importance of correct HSN code usage. Regular training sessions can help them stay updated on GST regulations and avoid errors.
Utilize ERP systems that integrate GST and HSN code updates. Such systems can automate the classification process, reduce human errors, and ensure that the latest codes are applied consistently.
Keep detailed documentation of all transactions, including the HSN codes used. This practice supports accurate tax filings and can be invaluable during audits or assessments.
Conclusion
Accurate GST HSN code usage is vital for GST compliance. Misreporting can lead to penalties up to Rs.50,000 under CGST and SGST laws. To avoid such issues, businesses should stay updated with the latest HSN classifications and GST rates. Regular staff training, implementing ERP systems, and maintaining detailed records are effective practices. For hassle-free GST compliance, Online Legal India offers expert assistance in GST registration and return filing, ensuring timely and accurate submissions to keep your business compliant. Visit Online Legal India today.
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