With GST, most of the goods and services were classified uniformly using Harmonised Commodity Description and Coding System or HSN.
The HNS is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). In 2017, an amendment was made in Section 141 and 146 of the Finance Act 2016 regarding the changes from the WCO HSN 2012 version to the 2017 version. It included 233 sets of amendments, divided as – agricultural sector 85; chemical sector 45; wood sector 13; textile sector 15; base metal sector 6; machinery sector 25; transport sector 18; other sectors 26.
Under GST, the majority of dealers will have to adopt two, four, or eight-digit HSN codes for their commodities, depending on their turnover the year prior.
The HSN is divided into 21 sections, 99 chapter, 1,244 headings, and 5,224 subheadings. Each HSN Section is a collection of various chapters and represents a broader class of goods. Chapters represent a particular class of goods which are further divided into various headings depending upon different types of goods belonging to the same class. The headings contain products, which are ultimately assigned an HSN code. HSN code uses dots to separate sections, chapters and sub-headings.
To find an HSN code for a product, first, select the Chapter, then select Section and filter the subheading to finally get the product code. For example, HSN code for Chana Roasted is 19.04.10.90 where 19 is the Chapter, 04 is the Section, 10 is the subheading and 90 is the product.