GST HSN Code List: A Detailed Overview

Q: Is the HSN code mandatory for a GST invoice?

Yes. As per CGST Notification 78/2020 (October 15, 2020): taxpayers with AATO up to ₹5 crore must report 4-digit HSN on B2B invoices (optional for B2C); taxpayers with AATO above ₹5 crore must report 6-digit HSN on all invoices.

Q: How to add the HSN code in the GST portal?

Enter the correct 8-digit HSN for each good or service in the relevant fields while raising invoices and during GST return preparation on the portal. Accurate HSN data is required at the time of return filing.

Q: Is the HSN code 6-digit or 8-digit?

In India, HSN typically consists of 8 digits: first two for chapter, next two for heading, last four for subheading and tariff item. Depending on turnover/invoice type, reporting may require 4- or 6-digit levels.

Q: Is the HSN Code needed during GST return filing?

Yes, for businesses crossing specified turnover limits, HSN codes must be reported while filing GST returns.

Q: Is it mandatory to use the HSN code for every business transaction?

Yes. Under GST, products use HSN codes and services use SAC codes. The level of HSN detail required depends on the taxpayer’s turnover and invoice type.

Q: How to find the correct HSN code for my product or service?

Use the GST HSN lookup tool or consult the official HSN lists provided by government portals to identify the correct code.

Q: Are there any penalties for using the incorrect HSN code in transactions?

Yes. Incorrect HSN can cause wrong tax computation and non-compliance, leading to fines and other legal consequences.

Q: Is the HSN code list the same for all countries, or does it vary internationally?

The WCO develops the HSN as an international standard, but specific codes, interpretations, and national tariff lines may differ slightly across countries.

Rajesh Kumar Kar
Nov 12
7 min read

The World Customs Organisation (WCO) created the Harmonised System Nomenclature (HSN) Code, an internationally standardised system for classifying commodities. The HSN Code, which offers a methodical and rational framework for categorising items, is essential to international trade. This approach makes it easier to identify products and apply the appropriate taxes and levies. Additionally, the HSN Code guarantees adherence to international trade laws and facilitates the gathering of statistics on foreign trade. The HSN Code aids in the uniform classification of commodities for taxation reasons in domestic contexts, especially under the Goods and Services Tax (GST) regime in India, making tax compliance easier for enterprises.

Table of Contents

What is the GST HSN Code?

Importance of GST HSN Code

GST HSN Code List

Applicability of GST HSN Code

Steps to Add HSN Code in GST Portal

Conclusion

FAQs

What is the GST HSN Code?

Harmonised System Nomenclature is represented by the HSN code. It is a 6-digit code that is used all over the world and serves as an accepted method of product classification. Consider it a global product ID for global commerce. By grouping commodities under one heading, this code streamlines the taxation procedure under the goods and services tax structure. An enhanced 8-digit system called the HSN Code is used in India to categorise items under the GST system. In order to further categorise products, it adds two more digits to the global 6-digit HSN code.

There are two main uses for this GST HSN code system:

Simplified Taxation: The applicable GST rate is immediately determined by the HSN code, which aids in identifying the particular product category. For enterprises, this makes tax administration and computation easier.
International Trade: By serving as a universal product identifier, the HSN code guarantees uniform classification across national boundaries. By removing ambiguity over product classification, this promotes more seamless international trade.

For businesses and international trade in India, HSN codes are a vital instrument.

Importance of GST HSN Code

The World Customs Organisation created the HSN, a logical and methodical classification system, to classify commodities globally.

Methodical Categorisation: The main goal of the HSN is to enable a consistent identification system by methodically and logically classifying commodities globally.
Facilitation of Cross-Border Trade: The efficiency of cross-border trade procedures is increased by the standardised HSN codes, which promote uniformity in international trade.
Precise Tax Computation: By accurately identifying products, HSN codes make it possible to apply the appropriate GST rates. This reduces the possibility of mistakes and guarantees proper tax computation.
The Need for Compliance: Under India's Goods and Services Tax (GST) system, HSN codes must be included on invoices in order to ensure correct reporting and compliance.
Effective Data Administration: HSN codes are utilised for effective data management, simplifying reporting and documentation procedures for companies.
Management of Inventory: By classifying and tracking products in a methodical manner, businesses can use HSN codes to efficiently manage their inventory, improving control and management.
Diminished Ambiguity: Businesses and tax authorities alike can more easily identify and comprehend the type of goods or services being exchanged, thanks to the standardised HSN codes, which eliminate uncertainty in product classification.

GST HSN Code List

Section	Chapter	Commodities	HSN Code	GST Rates (%)
I	01-05	Live animals; animal products	0101-0511	0%, 5%, 12%, 18%
II	06-14	Vegetable products	0601-1404	0%, 5%, 12%, 18%
III	15	Animal or vegetable fats and oils	1501-1522	5%, 12%, 18%
IV	16-24	Prepared foodstuffs; beverages, spirits and vinegar; tobacco	1601-2403	0%, 5%, 12%, 18%, 28%
V	25-27	Mineral products	2501-2715	5%, 12%, 18%
VI	28-38	Products of the chemical or allied industries	2801-3825	0%, 5%, 12%, 18%, 28%
VII	39-40	Plastics and articles, rubber and articles	3901-4017	12%, 18%
VIII	41-43	Raw hides and skins, leather, fur skins and articles	4101-4304	5%, 12%, 18%
IX	44-46	Wood, articles of wood, cork and articles of cork, manufacturers of straw	4401-4601	12%, 18%
X	47-49	Paper, paperboard, pulp of wood or of other fibrous cellulosic material	4701-4923	12%, 18%
XI	50-63	Textiles and textile articles	5001-6310	0%, 5%, 12%, 18%
XII	64-67	Footwear, headgear, umbrellas, sun umbrellas, walking sticks, seat sticks, whips, riding crops and parts thereof	6401-6702	12%, 18%
XIII	68-70	Ceramic products, glass items, glassware, articles of stone, plaster, cement, asbestos, mica or similar materials;	6801-7020	12%, 18%
XIV	71	Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	7101-7118	0%, 3%, 5%, 12%, 18%
XV	72-83	Base metals and articles of base metal	7201-8311	5%, 12%, 18%
XVI	84-85	Electrical equipment, Machinery and mechanical appliances, parts thereof	8401-8548	5%, 12%, 18%
XVII	86-89	Vehicles, aircraft, vessels and associated transport equipment	8601-8716	12%, 18%, 28%
XVIII	90-92	Clocks and watches, musical instruments, Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus,	9001-9209	12%, 18%
XIX	93	Arms and ammunition; parts and accessories thereof	9301-9306	12%
XX	94-96	Miscellaneous manufactured articles	9401-9617	12%, 18%
XXI	97	Works of art, collectors’ pieces and antiques	9701-9706	12%

Applicability of GST HSN Code

The majority of dealers must use a two, four, or eight-digit HSN Code for commodity dealing under the GST regime, depending on the turnover from the prior year.

Dealers are exempt from adopting the HSN code for their commodities if their previous year's turnover was less than Rs. 1.5 crore.
Dealers must use a two-digit HSN Code for their items if their revenue falls between Rs. 1.5 and Rs. 5 crore.
Dealers must acquire a four-digit HSN Code if their turnover exceeds Rs. 5 crore.
Regardless of turnover, an eight-digit HSN code is required for imports and exports since the GST HSN Code must adhere to relevant international norms and practices.

Steps to Add HSN Code in GST Portal

Step 1: Sign in to the GST website.

Step 2: Select "Services" > "Registration" > "Amendment of Registration Non-core fields" from the dashboard.

Step 3: After that, select the "Goods and Services" option.

Step 4: Select the "Goods" tab.

Step 5: Enter the item's name or HSN code to find the appropriate HSN chapter.

Step 6: Select "Save and proceed." Click "Save" repeatedly until you reach the verification stage.

Step 7: Finish the verification and send it using EVC or DSC.

Conclusion

The country's tax system has completely changed as a result of the decision to switch to an online taxation system and apply the HSN code under GST for the classification of items subject to taxation. Nonetheless, the administration is working to increase the transparency of the transition process. Because of this, a lot of things are moved from one slab to another based on the commerce and how they are used. Professionals may need to do some preparation work in order to make such a change, but the process can be supported by a number of automated GST compliance solutions.

FAQs

What is the HSN Code in GST?

In GST, products are categorised using the eight-digit HSN Code (Harmonised System of Nomenclature). It makes international trading easier and assists in identifying products for applying the appropriate GST rate.

Is the HSN code mandatory for a GST invoice?

Yes, according to CGST notification 78/2020 dated October 15, 2020, taxpayers with AATO of up to Rs. 5 crore in the prior fiscal year are required to report HSN codes on B2B invoices (4-digit codes), while this is optional for B2C invoices. Similarly, taxpayers with an AATO of more than Rs. 5 crore in the preceding fiscal year are required to report HSN codes (6-digit codes) on all invoices.

Is a GST bill valid without an HSN code?

No, an HSN code is required for a GST bill to be valid.

How to add the HSN code in the GST portal?

You must input the correct 8-digit HSN code for each good or service you provide in order to add an HSN code to the GST gateway. When submitting GST returns, this information is necessary.

Is the HSN code 6-digit or 8-digit?

The HSN code in India typically consists of eight digits. The chapter is represented by the first two numerals, the heading by the next two, and the subheading and tariff item by the last four digits.

Is the HSN Code needed during GST return filing?

For companies whose turnover exceeds certain limits, HSN codes are necessary when completing their GST returns.

Is it mandatory to use the HSN code for every business transaction?

Yes, under the GST framework, all business transactions must use the HSN code for products and the SAC code for services. Depending on the business's turnover, different requirements apply.

How to find the correct HSN code for my product or service?

To find the relevant HSN code for your goods or service, you can utilise the GST HSN code lookup tool or consult the government's extensive HSN code list.

Are there any penalties for using the incorrect HSN code in transactions?

Using the incorrect HSN code might result in improper tax calculations and non-compliance with GST requirements, hence there may be fines. Fines and other legal ramifications are examples of the consequences.

Is the HSN code list the same for all countries, or does it vary internationally?

The World Customs Organisation (WCO) created the HSN code system, an international standard; nevertheless, the particular codes and their uses may differ slightly between nations.

How often is the HSN code list updated, and how can I access the latest version?

The HSN code list is updated on a regular basis by the Indian government and the WCO. The Central Board of Indirect Taxes and Customs (CBIC) and other government websites offer the most recent version.

What is the purpose of adopting the GST HSN Code in India?

In line with other nations that use the HSN system, India's GST HSN Code seeks uniformity in the taxation of goods. This standardisation lowers the cost of international trade and streamlines GST taxation.