HSN (Harmonized System of Nomenclature)

HSN will be applicable in India after implementation of GST. India has already been using HSN system in the Central Excise and Customs regime. 

With the introduction of Goods and Services Tax (GST) regime, there is a need for a more uniform classification not only at the national level but also at the international level too. Therefore, India has adopted the Harmonized System of Nomenclature (HSN) for goods and the Service Accounting Code (SAC) system for services.

It is a much more detailed classification that added another two digits to the 6-digit structure. There is a requirement to mention HSN code of items in tax invoice under GST. 

Provisions related to HSN under GST are given below:-

1. Less than Rs 1.5 crores    =>   No HSN code required 

2. Between Rs 1.5 crores and Rs 5 crores => Two-digit HSN codes

3. Above Rs 5 crores           =>    Four-digit HSN codes