About HSN Code

• The Harmonized Commodity Description and Coding System generally referred to as “Harmonized System” or simply “HS” is a multipurpose international product nomenclature developed by the World Customs Organization in 1988.
• It is a six-digit code that classifies more than 5000 products, arranged in a legal and logical structure. To achieve uniform classification, the HSN is supported by well-defined rules and is accepted worldwide.
• HSN code is used by customs authorities, statistical agencies, and other government regulatory bodies, to monitor and control the import and export of commodities.
  • India has been using HSN codes since 1986 to classify commodities for Customs and Central Excise. 
• HSN classification is widely used for taxation purposes by helping to identify the rate of tax applicable to a specific product in a country that is under review. It can also be used in calculations that involve claiming benefits.

Significance of HSN

• It acts as a universal economic language and code for goods and an indispensable tool for international trade.
• The system helps in harmonising customs and trade procedures thus reducing costs in international trade.

HSN code removes the need to upload details about the goods which makes filing of GST returns easier in India.