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Merchants are reporting their sales correctly as per tax laws. In general, HSN code plays an important role in the GST system and makes the taxation process simple and effective for businesses and tax authorities. Understanding the importance of HSN code in India India has been a member of the World Customs Organization (WCO) since 1971 and since 1986, Customs and Central Excise have been using 6-digit HSN codes according to the type of goods. Later, some more numbers were also included in the code to differentiate the goods. With the advent of GST (Goods and Services Tax), HSN codes are used in India under a three-tier system, which provides a clear framework for businesses to categorize their goods. Businesses with an annual turnover of Rs. If the income is less than Rs 1.5 crore, they are exempted from using HSN code.


Businesses with an annual turnover of Rs. 1.5 crore and above Rs. If the income is less than Rs 5 crore, it is mandatory to use two digit HSN code. Businesses with an annual turnover of Rs. 5 crore, it is mandatory to use four-digit HSN code. The eight-digit HSN code is required for Albania WhatsApp Number businesses that import and export goods. The three-tier system ensures that businesses of different sizes can appropriately characterize their HSN codes according to their needs. Adoption of HSN system has made it easier for businesses to comply with the tax regulations and classification of goods related to GST rules. How does HSN Code work? The HSN code system covers more than 5000 products.




It is used to organize products in a logical and detailed manner. The HSN code system is recognized worldwide for organizing categories of products on a unified level. The HSN category is often used for tax purposes and also helps in calculating the rate of input tax credit claim. But it is not limited to taxes only, but it also applies to imports and exports, from which the total number of goods imported or traded in the country can be estimated. What is the meaning of 8 digit HSN code or what is the structure of HSN code? The HSN code consists of 21 parts which are divided into 99 chapters. Each chapter defines a specific product.