From UPSC perspective, the following things are important :
Prelims level : HSN Code
Mains level : Not Much
It has been made mandatory for a GST taxpayer having a turnover of more than Rs 5 crore in the preceding financial year, to furnish 6 digits HSN Code (Harmonized System of Nomenclature Code). This comes into effect from April 1.
- The Harmonized System, or simply ‘HS’, is a six-digit identification code developed by the World Customs Organization (WCO).
- Called the “universal economic language” for goods, it is a multipurpose international product nomenclature.
- Over 200 countries use the system as a basis for their customs tariffs, gathering international trade statistics, making trade policies, and monitoring goods.
- The system helps in harmonizing customs and trade procedures, thus reducing costs in international trade.
What makes the 6 digit code?
- A unique six-digit code has numbers arranged in a legal and logical structure, with well-defined rules to achieve uniform classification.
- Of the six digits, the first two denote the HS Chapter, the next two give the HS heading, and the last two give the HS subheading.
- The HS Code for pineapple, for example, is 0804.30, which means it belongs to Chapter 08 (Edible fruit & nuts, peel of citrus/melons), Heading 04 (Dates, figs, pineapples, avocados, etc. fresh or dried), and Subheading 30 (Pineapples).