HSN Code for Transportation Services:

HSN is the abbreviation used for the Harmonized System of Nomenclature. HSN code was initially developed by the World Customs Organization (WCO) in the year 1988 and is widely accepted by more than 200 nations worldwide.

HSN is a 6-digit uniform code that is used to classify over 5000 products & services. In the Goods and Services Tax regime, the goods, and services in India are classified under two sections either in the Harmonized System of Nomenclature Code system or the SAC Code System. Goods & products are classified under the Harmonized System of Nomenclature whereas Services under Service Accounting Code (SAC).

VARIOUS HSN CODE UNDER GST

On the basis of turnover, the Harmonized System of Nomenclature code is classified under GST as follows:

Above 5 Crore: 4 digit Harmonized System of Nomenclature (HSN) Code shall be used.

Above 1.5 Crore but less than 5 Crore: 2 digit Harmonized System of Nomenclature (HSN) code shall be used.

Below 1.5 Crore: Not required to mention Harmonized System of Nomenclature code on the invoices.

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2-DIGIT HSN CODE FOR GOODS

The taxpayers with a turnover limit between 1.5 crore & 5 crores in the preceding financial year, must specify HSN codes for the first year of GST operations. From the second year onwards GST operations, HSN code will be mandatory for all taxpayers with turnover falling within the range of 1.5 crore and Rs. 5 crores in the previous financial year.

4-DIGIT HSN CODE FOR GOODS

4 digits Harmonized System of Nomenclature code will be mandatory for taxpayers with turnover over & above Rs. 5 crores in the preceding financial year. For the first year, the taxpayer’s self-declaration will be considered as actual turnover. After the first-year completion, the turnover for the previous year will be considered for determining the use of 4-digit HSN codes.

8-DIGIT Harmonized System of Nomenclature (HSN) CODE FOR EXPORT AND IMPORT OF GOODS

In the case of import & exports of goods 8 digits, HSN Codes is mandatory.

PURPOSE OF ADOPTING HSN CODE IN INDIA

After the introduction of the Goods and Services Tax, the enactment of the Harmonized System of Nomenclature code in India is bringing the country at par with the other countries which has been following HSN for years. To standardize the goods & services tax (GST) across the nation and improve its international acceptability, HSN code was adopted by India. This has also minimized the costs that are related to international trade as it will bring harmonization in trade and customs procedures.

HSN codes helps in bridging and simplifying the trade-related procedures in India, but how? Harmonized System of Nomenclature Codes help in specifying the corresponding GST rate applicable on the product automatically that is why it is mandatory to mention the correct HSN codes while GST returns filing.

FREQUENTLY ASKED QUESTIONS (FAQ’S)

What is HSN Code under GST?

Harmonized System of Nomenclature or Harmonized System of Nomenclature (HSN) Code is a 6-digit uniform code allotted to over 5000 goods and is universally accepted. Conceived and developed by World Customs Organization (WCO) in order to classify goods from all over the world in a systematic way. Adopted by more than 200 nations, HSN code covers almost 98% of all goods produced and traded across borders.

What is SAC Code?

SAC stands for Service accounting code and it is framed on the same lines as Harmonized System of Nomenclature Code. SAC stands for Service Accounting Code and is used to classify services rather than goods. All services tend to begin with the number 99, which helps in identifying the code as SAC and not HSN.

Is HSN Code mandatory?

Businesses dealing with the import/export of good is mandatory to use the 8-digit Harmonized System of Nomenclature Code. Businesses having an annual turnover of fewer than 1.5 crores are exempted; dealers registered under the Composition Scheme of GST are also exempted from using HSN Codes.

Q What is the HSN code list?

S. No	Section	Products List
1	Section 1	Live Animals
2	Section 2	Vegetable and its products
3	Section 3	Animal or vegetable fats
4	Section 4	Prepared foodstuffs, Manufactured tobacco
5	Section 5	Mineral products
6	Section 6	Chemical products
7	Section 7	Plastic and rubber products
8	Section 8	Raw hides and skins, Leather, Furskins and articles thereof, travel goods, handbags, and similar containers
9	Section 9	Manufacturers of wood and wood products, charcoal, cork and cork products, straw, esparto, or other knitted materials
10	Section 10	The pulp of wood or of other Fibrous Cellulosic Material, Recovered ( Waste and scrap ) paper or paperboard, paper and paperboard and articles thereof
11	Section 11	Textile products
12	Section 12	Footwear, hats, umbrellas, sun umbrellas, walking sticks, seat sticks, whips, riding-crops, and their parts
13	Section 13	Articles of stone, plaster, cement, asbestos, mica, or similar materials, ceramic products, glass and glassware
14	Section 14	Natural or cultured pearls, precious or semi-precious stones, precious metals, metals covered with precious metals, and their products
15	Section 15	Base Metals and Articles of Base Metal
16	Section 16	Machinery and mechanical appliances, electrical equipment, parts thereof
17	Section 17	Vehicles, Aircraft, Vessels and Associated Transport Equipment
18	Section 18	Optics, photography, movies, measurements, checks, precision, medical or surgical instruments, and devices, watches, watches, etc.
19	Section 19	Arms and ammunition, parts and accessories thereof
20	Section 20	Miscellaneous Manufactured Articles
21	Section 21	D Antiques, Works of art, Collectors’ Pieces a

Is HSN code mandatory for the GST invoice?

Yes, it is mandatory to mention the Harmonized System of Nomenclature code on the GST invoice.

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Why is it necessary to follow the HSN code?

HSN Code facilitates the integration of the goods & products globally. It helps in setting international standards for all the products which are manufactured globally. HSN Code is an internationally accepted system of classifying products.

Is HSN code required while GST Return filing?

Yes, HSN Code is required for GST return filing because it helps in identifying the product classification

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HSN CODE FOR TRANSPORTATION