What is GST?
Goods and Services Tax (GST) is a Single Tax Structure System introduced in 2017. GST works on One Nation, One Tax system. Earlier, there was a diverse tax system in India. There were various indirect taxes such as Value Added Tax (VAT), sale tax, purchase tax, service tax, surcharges, Excise duty, etc. Under the GST System, all the central and state taxes are merged into a single tax.
What are GST Rates for Goods & Services?
GST has refined the taxation sector in India. It helps in unifying all taxes for various goods and services. There are a large number of goods, commodities and services in India. So, they are put under 5 different slabs of GST rates-
- NIL: Under this slab 0% tax is charged on the goods or services.
- 5%: Under this slab 5% tax is charged on the goods and services.
- 12%: Under this slab 12% tax is charged on the goods and services.
- 18%: Under this slab 18% tax is charged on the goods and services.
- 28%: Under this slab 28% tax is charged on the goods and services.
Important Note: Gold and other precious metals are excluded and put under 3% tax slab.
What is an HSN Code?
HSN Code stands for Harmonized System of Nomenclature. An HSN Code is a unique 6 to10 digit number developed for the identification of goods and products. This system was established in 1988 by the World Customs Organization. The HSN Code system is operational in all parts of the world. It covers almost 90% of the goods traded globally. It is accepted by customs authorities for determining taxes on goods.
How does the HSN Code System in India Functions?
HSN Codes held a great significance in Import-Export Procedures of India. In India, it is called ITC (Indian Trade Clarification)-HS Code. An ITC HS Code is recognized from its Chapter, Heading, Subheading and Regional Tariff. It consists of 8 digits.
Let’s take an example: Suppose we are given an HS Code- 6006840000
- Chapter: The First two digits (60) denotes chapter
- Heading: Next two digits (06) denote headings.
- Subheading: Further, two digits (84) denote subheadings.
- Regional Tariff: Second Last Two digits (00) denote Regional Tariff.
- National Tariff: Last Two Digits (00) indicates National Tariff.
How many sections, chapters, heading and subheading Does HS Code System Covers?
There are around 21 sections, 99 chapters, 5,222 heading and 1,244 subheadings in the Harmonised system of Nomenclature.
What is the use of HSN Code in GST?
Ever since the arrival of GST, it is mandatory to mention HSN Code for your product. HSN Codes are needed to be mentioned on invoices, bills or filing GST returns. HSN Code helps taxpayers to evaluate GST rates of various products. An incorrect HSN Code can create a big hurdle in the customs clearance process.
How can I find HSN Code List with GST Rates?
You can find a complete HSN Code List with GST rates at Exim Trade Data portal.