HsN Code in a Tax Invoice (Download PDF)

Doorsteptutor material for CLAT is prepared by world's top subject experts: fully solved questions with step-by-step explanation- practice your way to success.

  • The Central Board of Indirect Taxes and Customs (CBIC) has made it compulsory to mention 8-digit HSN or tariff code for 49 chemical-based products at the time of issuing Goods and Services Tax (GST) invoice. This step is aimed at curbing tax evasion.
  • From December 1,2020 onwards every supplier has been notified to mention 8 digits of HSN Code in every tax invoice. This is irrespective of the scale of operations.
Nylon Moulding Powder

HsN Code Overview

  • It is Harmonized System of Nomenclature.
  • Harmonized System was developed by World Customs Organization.
  • HS a six-digit identification code.
  • In India, HS code is known as HSN code and it uses 8-digits.
  • The code consists of more than 5000 commodity groups.
  • This code is also known as universal economic language for goods.
  • It is used by more than 200 countries and economies.
  • Multipurpose International product nomenclature.

HSN code further consists of:

  • 21 sections
  • 99 chapters
  • 1,244 headings
  • 5,224 subheadings

Digits of the Code:

  • First two denote the HS chapter.
  • The next two are the HS heading.
  • The last two are the HS subheading.

Example

HSN of Brinjal is 06031010. , here ‘06’ denotes the chapter of “Edible Vegetables” ‘03’ denotes headings in the chapter (onions, garlic, etc.) , the rest denote the subheading.

Importance of HsN Code

  • This code makes GST being systematic and globally accepted.
    • Facilitates GST returns through automation.
    • Detailed Description of the goods need not be uploaded.
  • HSN code further helps in identifying the tax rate applicable to a product.
  • Statistical Agencies, customs authorities and other government regulatory bodies can use this code for controlling the import and export of the commodities.

Application in:

  • Custom tariff
  • Collection of internet access
  • Collection of International Trade statistics
  • Transport tariffs and Statistics
  • Areas related to custom control and procedures
  • Monitoring of controlled goods such as Marijuana
  • Other controlled goods being monitored includes Chemical Weapons, endangered species, Ozone layer depleting substances

UQC under GsT

  • UQC stands for Unique Quantity Code and is a unit of measurement such as 1 kg of rice.
  • Any tax invoice, credit note, debit note must have UQC as per CGST Rules.

- Published/Last Modified on: May 25, 2021

Economy, International Relations/Organizations

Developed by: