What is GST Product Classification or HSN Codes? How does it work?

Under GST Product Classification, products in each category have been classified into HSN Codes. HSN codes need to be present at the time of filing GST Tax to the government in addition to your GST ID.

Watch the video below to learn about GST Product Classification or HSN Codes-

HSN code of a product can be of 4 digits or 2 digits. The HSN code that online sellers have to use depends on your annual turnover. Let us learn this with the help of an example.

Ramesh, Suresh and Jai are three online sellers who are selling leather shoes with rubber soles. Let us see which HSN code will they use-

  • Ramesh: Annual Turnover is greater than 5 crores then HSN Code is 6403
  • Suresh: Annual Turnover is greater than 1.5 crores & less than 5 crores then HSN code is 64
  • Jai: Annual Turnover is less than 1.5 crores then No HSN code is required.

Note that GST tax rate applicable for Ramesh, Suresh and Jai will either be either 5% (if shoe is less than Rs. 500) or 18% (if shoe is greater than Rs. 500).

Similarly, if an online seller is selling-

  1. Sports Shoes: HSN code will be 6404 or 64
  2. Sandals or Flipflops (Rubber/Plastic): HSN code will be 6402 or 64
  3. Wristwatch (metal): HSN code will be 9101 or 91
  4. Sunglasses or spectacles: HSN code will be 9004 or 90
  5. Sarees: HSN code will be 5407 or 54
  6. Unstitched dress material: HSN code will be 6307 or 63

Don’t worry! In the coming days, Shop101 will be introducing an easy way to classify your products using the Shop101 App. HSN codes will be automatically assigned to your products.

We will be releasing more informative videos on GST , you can subscribe to our YouTube channel so that you don’t miss future updates.

 

12 Replies to “What is GST Product Classification or HSN Codes? How does it work?”

    1. Hello Khateeb. If you sell any of your products online, you will need to pay GST for it. For e-commerce, i.e. online selling, there is no minimum turnover for the GST tax bracket. Hope this clarifies your question.

    1. Hi Isha,
      Glad we could be of help! Do let us know should you have any other queries or concerns about GST for online sellers and we will be happy to answer them.
      Best,
      Team Shop101

    1. Hi Mohamed,
      Would you have a specific question or query that you might need information to?
      We will be uploading and updating with all GST related information on this blog as well as on our official facebook page and youtube channel. Please find the links below:
      Shop101 Youtube Channel: https://www.youtube.com/channel/UCYj9zI24Ls0IZMP1wznHc7w
      Shop101 Facebook Page: https://www.facebook.com/shop101.ind/
      Do remember to follow us to stay updated with all important news related to GST for online sellers.
      Best,
      Team Shop101

  1. There is many products like different screws different plastics mashining parts small very different iteams in market . then how managed 4 digit hsn code ? Some parts us in different way then how we decided that this products code & tax

    1. Hi Hemang. Every product that can be legally sold in India is mapped to different categories and subcategories of products, each of which have an HSN Code. For instance:
      – 2 digit HSN code for the category Steel and Iron Articles: 73
      — 4 digit HSN code for subcategory Screws, Nuts and Bolts made of Steel and Iron: 7318
      The Govt. of India has released a comprehensive list of such HSN codes on their official communication channels, however, you will need to search for your own categories and find the applicable HSN Codes.
      At Shop101, we have made this process much easier by translating the technical categories into commonly used products or categories. As such, Shop101 users can very easily identify and mark the type of product they are selling and the app itself will automatically take care of the HSN code mapping. Hope this answers your question.

      1. I have some query and im unable to know tha tax ratio on my goods im dealing in.
        Im all set with GST got GSTIN but the only trouble im getting is im unable to know the ratio can anyone please help me to know what is the tax ratio on Electronic cigrates (Vapes)
        Any help or suggestion will be appreciated
        Thanks

        1. Hi Nitin, Please request for classification of your products from the app. We add relevant GST category based on the request.

    1. Hi The Mart, We will be introducing an easy way to classify your products with HSN codes and applicable tax rates in the Shop101 App next udpate. Some of the common HSN codes in electronics gadgets are speakers, earphones or headphones (8518), mobile phones (8517), memory cards (8523). The two digit HSN code for electronic gadgets will be 85.

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