How does HSN code work?
It has about 5,000 commodity groups, each identified by a six-digit code, arranged in a legal and logical structure. It is supported by well-defined rules to achieve uniform classification.
Why is HSN important?
The main purpose of HSN is to classify goods from all over the World in a systematic and logical manner. This brings in a uniform classification of goods and facilitates international trade
HSN Worldwide
The HSN system is used by more than 200 countries and economies for reasons such as:
- Uniform classification
- Base for their Customs tariffs
- Collection of international trade statistics
Over 98% of the merchandise in international trade is classified in terms of the HSN.
Harmonized System of Nomenclature number for each commodity is accepted by most of the countries. The HSN number remains same for almost all goods. However, HSN number used in some of the countries varies little, based on the nature of goods classified.
HSN in India
India is a member of World Customs Organization(WCO) since 1971. It was originally using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central Excise added two more digits to make the codes more precise, resulting in an 8 digit classification.
Understanding the HSN Code
The HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and 5,224 subheadings.
- Each Section is divided into Chapters. Each Chapter is divided into Headings. Each Heading is divided into Sub Headings.
- Section and Chapter titles describe broad categories of goods, while headings and subheadings describe products in detail.
For example:
Handkerchiefs made of Textile matters 62.13.90
- First two digits (62) represent the chapter number for Articles of apparel and clothing accessories, not knitted or crocheted.
- Next two digits (13) represent the heading number for handkerchiefs.
- Finally, last two digits (90) is the product code for handkerchiefs made of other textile materials.
India has 2 more digits for a deeper classification.If the handkerchiefs are made from a man-made fibre, then the HSN code is 62.13.90.10.
Structure of HSN Code in India
Services Accounting Code (SAC) in GST
Like goods, services are also classified uniformly for recognition, measurement and taxation. Codes for services are called Services Accounting Code or SAC
For example:
Legal documentation and certification services concerning patents, copyrights and other intellectual property rights-- 998213
- The first two digits are same for all services i.e. 99
- The next two digits (82) represent the major nature of service, in this case, legal services
- The last two digits (13) represent detailed nature of service, i.e., legal documentation for patents etc.
HSN in GST
HSN codes to be declared up to 31st March 2021:
| Transaction Charges | No. of digits of HSN to be declared |
|---|---|
| Upto 1.5 crore | 0 |
| 1.5 crore- 5 crore | 2 |
| More than 5 crore | 4 |
Declaration of HSN Code for Goods and Services
HSN codes to be declared from 1st April 2021:
(Vide CGST notification number 78/2020 dated 15th October 2020)
| Transaction Charges | Type of Invoice document | No. of digits of HSN to be declared |
|---|---|---|
| Up to 5 crore | Mandatory for B2B tax invoices | 4 |
| Optional for B2C tax invoices | 4 | |
| More than 5 crore | Mandatory for all invoices | 6 |
*Annual aggregate turnover for the previous financial year, i.e., for reporting invoice in FY 2021-22, turnover to be referred must be of FY 2020-21.
- These HSN codes must be declared in every tax invoice issued by the taxpayer under GST.
- All 8 digits of HSN code is mandatory in case of export and imports under the GST.
Why is HSN important under GST?
The purpose of HSN codes is to make GST systematic and globally accepted.
HSN codes will remove the need to upload the detailed description of the goods. This will save time and make filing easier since GST returns are automated.
A dealer or a service provider must provide HSN/SAC wise summary of sales in his GSTR-1 if his turnover falls in above slabs.
HSN - wise summary of outward supplies
Chapter wise distribution of goods using HSN codes
| Chapter | Commodities |
|---|---|
| Section I. Animals and Animal Products | |
| Chapter 1 | Animals |
| Chapter 2 | Meat and edible offal |
| Chapter 3 | Fish, molluscs, crustaceans, and other aquatic invertebrates |
| Chapter 4 | Dairy produce, birds' eggs, honey and other edible products of animal origin that are not specified elsewhere |
| Chapter 5 | Other products of animal origin that are not specified elsewhere |
| Section II. Vegetables and Vegetable Products | |
| Chapter 6 | Live trees and plants, bulbs, roots, etc., cut flowers and ornamental foliage |
| Chapter 7 | Edible vegetables, certain roots and tubers |
| Chapter 8 | Edible fruit and nuts, the peel of citrus fruits or melons |
| Chapter 9 | Tea, coffee, mate and spices |
| Chapter 10 | Cereals |
| Chapter 11 | Milling products, malt, wheat gluten, starches, and inulin |
| Chapter 12 | Oil seeds and oleaginous fruits, grains, straw and fodder, seeds and fruit, and industrial or medicinal plants |
| Chapter 13 | Lac, gum, resin, and other saps and extracts |
| Chapter 14 | Vegetable plaiting materials, and vegetable products that are not specified elsewhere |
| Section III. Animal or Vegetable Oils, Their Cleavage Products, Waxes, and Prepared Edible Fats | |
| Chapter 15 | Animal or vegetable oils, their cleavage products, waxes, and prepared edible fats |
| Section IV. Prepared Food, Beverages, Spirits, Tobacco and Tobacco Substitutes | |
| Chapter 16 | Preparation of meat, fish or crustaceans, molluscs, or any other aquatic invertebrates |
| Chapter 17 | Sugar and sugar confectionery |
| Chapter 18x | Cocoa and cocoa preparations |
| Chapter 19 | Preparations of cereals, starch, flour, milk, and pastry products |
| Chapter 20 | Preparation of vegetables, fruits, nuts, or plant parts |
| Chapter 21 | Miscellaneous edible preparations |
| Chapter 22 | Beverages, vinegar, and spirits |
| Chapter 23 | Residue and food waste, prepared animal fodder |
| Chapter 24 | Tobacco and tobacco substitutes that are manufactured |
| Section V. Minerals | |
| Chapter 25 | Salt, earths and stones, sulphur, plastering material, lime, and cement |
| Chapter 26 | Ores, slag, and ash |
| Chapter 27 | Mineral fuel, mineral oils and products of their distillation, mineral waxes, and bituminous substances |
| Section VI. Chemical Products or of Allied Industries | |
| Chapter 28 | Inorganic chemicals, organic or inorganic compounds of precious metals, rare-earth metals, radioactive elements, or isotopes |
| Chapter 29 | Organic chemicals |
| Chapter 30 | Pharmaceutical products |
| Chapter 31 | Fertilisers |
| Chapter 32 | Tanning or dyeing extracts, tannins and their derivatives, dyes, pigments, and other colouring matter, varnishes and paints, inks, putty and other mastics |
| Chapter 33 | Essential oils and resinoids, cosmetic or toilet preparations, perfumery |
| Chapter 34 | Soap, washing preparations, organic surface-active agents, lubricating preparations, prepared waxes, artificial waxes, polishing or scouring preparations, candles and similar items, modelling pastes, dental preparations and dental waxes with a basis of plaster |
| Chapter 35 | Albuminoidal substances, glues, enzymes, and modified starches |
| Chapter 36 | Explosives, pyrotechnic products, pyrophoric alloys, certain combustible preparations, and matches |
| Chapter 37 | Photographic or cinematographic goods |
| Chapter 38 | Miscellaneous chemical products |
| Section VII. Plastics, Rubber, and Articles Thereof | |
| Chapter 39 | Plastics and plastic articles |
| Chapter 40 | Rubber and rubber articles |
| Section VIII. Raw Hides and Skins, Furskins and Articles Thereof, Leather, and Related Goods | |
| Chapter 41 | Raw hides and skins (other than furskins) and leather |
| Chapter 42 | Articles made of leather, travel goods, handbags and similar containers, saddlery and harnesses, articles made of animal gut (other than silkworm gut) |
| Chapter 43 | Furskins and artificial fur and articles thereof |
| Section IX. Wood and Wooden Articles, Wood Charcoal, Cork and Articles of Cork, Basket Ware and Wickerwork, Manufacturers of Straw, Esparto or Other Plaiting Material | |
| Chapter 44 | Wood and wooden articles, wood charcoal |
| Chapter 45 | Cork and articles of cork |
| Chapter 46 | Manufactures of straw, esparto or other plaiting materials, basket ware and wickerwork |
| Section X. Pulp of Wood or Other Fibrous Cellulosic Material, Recovered Paper or Paperboard (Waste and Scrap), Paper and Paperboard and Articles Thereof | |
| Chapter 47 | Pulp of wood or other fibrous cellulosic material, recovered paper or paperboard (waste and scrap) |
| Chapter 48 | Paper and paperboard, articles made of paper pulp, or articles made of paper or paperboard. |
| Chapter 49 | Printed books, pictures, newspapers, and other products of the printing industry, typescripts, manuscripts, and plans |
| Section XI. Textile and Textile Articles | |
| Chapter 50 | Silk |
| Chapter 51 | Wool, fine or coarse animal hair, horse hair yarn and other woven fabrics |
| Chapter 52 | Cotton |
| Chapter 53 | Other vegetable textile fibres, paper yarn and woven fabrics made of paper yarn |
| Chapter 54 | Man-made filaments |
| Chapter 55 | Man-made staple fibres |
| Chapter 56 | Wadding, felt and nonwovens, twine, cordage, special yarns, ropes, and cables and articles thereof |
| Chapter 57 | Carpets and textile floor coverings |
| Chapter 58 | Special woven fabrics, lace tapestries, tufted textile fabrics, trimmings, and embroidery |
| Chapter 59 | Impregnated, covered, coated, or laminated textile fabrics, textile articles made for industrial use. |
| Chapter 60 | Knitted or crocheted fabrics |
| Chapter 61 | Articles of apparel and clothing accessories that are knitted or crocheted |
| Chapter 62 | Articles of apparel and clothing accessories that are not knitted or crocheted |
| Chapter 63 | Other made up textile articles, sets, worn clothing and textile articles, and rags |
| Section XII. Footwear, Headgear, Umbrellas, Walking Sticks and Seat Sticks, Whips, Riding Crops and Parts Thereof, Artificial Flowers, Articles of Human Hair, Prepared Feathers and Articles Made Thereof | |
| Chapter 64 | Footwear, gaiters, etc., and the parts of such articles |
| Chapter 65 | Headgear and parts thereof |
| Chapter 66 | Umbrellas and sun umbrellas, walking sticks, seat sticks, riding crops and parts thereof, and whips |
| Chapter 67 | Prepared feathers and down and articles made thereof, artificial flowers, and articles made of human hair |
| Section XIII. Articles Made of Stone, Plaster, Asbestos, Cement, Mica, or Other Similar Materials, Glass and Glassware, Ceramic Products | |
| Chapter 68 | Articles made of stone, plaster, cement, asbestos, mica or similar materials |
| Chapter 69 | Ceramic products |
| Chapter 70 | Glass and glassware |
| Section XIV. Natural or Cultured Pearls, Precious Metals Clad With Precious Metal and Articles Thereof, Precious or Semi-Precious Stones, Coins, Imitation Jewellery | |
| Chapter 71 | Natural or cultured pearls, precious metals, metals that are clad with precious metal and articles thereof, precious or semi-precious stones, imitation jewellery, coins |
| Section XV. Base Metal and Articles Made of Base Metal | |
| Chapter 72 | Iron and steel |
| Chapter 73 | Articles made of iron or steel |
| Chapter 74 | Copper and articles thereof |
| Chapter 75 | Nickel and articles thereof |
| Chapter 76 | Aluminium and articles thereof |
| Chapter 77 | (Reserved for possible future use) |
| Chapter 78 | Lead and articles thereof |
| Chapter 79 | Zinc and articles thereof |
| Chapter 80 | Tin and articles thereof |
| Chapter 81 | Other base metals, cermets, and articles thereof |
| Chapter 82 | Tools, implements, spoons and forks, cutlery, of base metal, and parts thereof |
| Chapter 83 | Miscellaneous articles made of base metal |
| Section XVI. Machinery and Mechanical Appliances, Electrical Equipment and Parts Thereof, Sound Reproducers and Recorders, Television Image and Sound Reproducers and Recorders, and Parts and Accessories of Such Articles | |
| Chapter 84 | Nuclear reactors, machinery and mechanical appliances, boilers, and parts thereof |
| Chapter 85 | Electrical machinery and equipment and parts thereof, sound reproducers and recorders, television image and sound reproducers and recorders, and parts and accessories of such articles |
| Section XVII. Vehicles, Aircraft, Vessels, and Associated Transport Equipment | |
| Chapter 86 | Tramway or railway locomotives, tramway or railway track fixtures and fittings and parts thereof, rolling stock and parts thereof, mechanical (including electro-mechanical) traffic signalling equipment of all kinds |
| Chapter 87 | Vehicles other than tramway or railway rolling stock, and parts and accessories thereof |
| Chapter 88 | Aircraft, spacecrafts, and parts thereof |
| Chapter 89 | Ships, boats and floating structures |
| Section XVIII. Optical, Photographic, Cinematographic, Checking, Measuring, Precision, Medical or Surgical Instruments and Apparatus, Musical Instruments, Clocks and Watches, Parts and Accessories Thereof | |
| Chapter 90 | Optical, photographic, cinematographic, checking, measuring, precision, medical or surgical instruments and apparatus, parts and accessories thereof |
| Chapter 91 | Clocks and watches and parts thereof |
| Chapter 92 | Musical instruments, and parts and accessories of such articles |
| Section XIX. Arms and Ammunition, Parts and Accessories Thereof | |
| Chapter 93 | Arms and ammunition, parts and accessories thereof |
| Section XX. Miscellaneous Manufactured Articles | |
| Chapter 94 | Furniture, mattresses, mattress supports, bedding, cushions and similar stuffed furnishing, lamps and lighting fittings, which are not elsewhere specified or included, illuminated signs and name-plates and the like, prefabricated buildings |
| Chapter 95 | Toys, games and sports requisites, parts and accessories thereof |
| Chapter 96 | Miscellaneous manufactured articles |
| Section XXI. Works of Art, Collectors’ Pieces and Antiques | |
| Chapter 97 | Works of art, collectors' pieces and antiques |
| Chapter 98 | Project imports, laboratory chemicals, personal imports by air or post, passenger's baggage, ship stores |
| Chapter 99 | Services |
How can I find my product in HSN list and its relevant HSN Code?
Please visit our handy HSN Calculator to find out both HSN codes of goods & SAC codes of services.
What is UQC?
UQC stands for Unique Quantity Code. In simple terms, it is a unit of measurement such as 1 kilogramme of wheat, 1 litre of oil etc.
What is UQC in GST?
As per CGST Rules, any tax invoice, credit note, debit note must have UQC or quantity unit description.
For example-
100 metres of fabric
Refer our article on
UQC for more information.
To minimize errors while filing GST returns, it’s important to know the right HSN code for your product.
Use ClearTax HSN Calculator to find out the HSN code for your product. Our ClearTax GST Software has all the HSN codes inbuilt. You need to select the items you sell only once in the Item Master. Once you are done, your HSN code will be automatically populated in all your invoices and returns.
Simplify your GST Filing Process with ClearTax GST Software.
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