HSN codes: how to pick the right one
An HSN code is a classification, not a label, and the classification decides the rate. Picking one because it sounds like your product is how businesses end up charging the wrong tax for three years.
- Chapter 73
- Articles of iron or steel
- Heading 7308
- Structures and parts of structures
- Subheading 7308.90
- Other structures and parts
- Further digits
- National tariff detail, 8 digits in India
How to get it right
The structure is hierarchical
Chapter, heading, subheading, then national detail. Two digits identify the chapter, four the heading, six the international subheading, eight the Indian tariff line.
Digits depend on turnover
How many digits your invoice must carry depends on your turnover band, and the requirement has been tightened. Check the current notification rather than your old setup.
Classify by material and function
The rules of interpretation favour the most specific description, and where goods are made of several materials, the one that gives them their essential character.
Services use SAC, not HSN
A separate list with its own structure. Putting an HSN code on a service line is a common error.
The rate follows the code
Which is why this matters: an incorrect classification means an incorrect rate, and the exposure runs backwards over every invoice you have raised.
When two codes could apply
Take advice, document the reasoning, and apply it consistently. A defensible, consistently applied choice is far better than an unexamined one.
How to classify a product
- Start from the material. Steel bracket before "bracket" — the chapter is usually determined by what a thing is made of.
- Find the heading. Within the chapter, by function or form. This is where most of the decision happens.
- Go to the digits you need. To the level your turnover band requires, using the tariff rather than a search engine.
- Record the reasoning. Against the item, so the next person does not re-decide it differently.
HSN questions
How many HSN digits do I need on my invoice?
It depends on your aggregate turnover, and the requirement has been progressively tightened. Check the current notification for your band — this is one of the few places where using a figure you learned two years ago is actively risky.
What happens if I use the wrong HSN code?
The rate usually follows the classification, so a wrong code frequently means the wrong rate, with exposure running back across every invoice raised under it. It is worth getting advice on anything ambiguous rather than choosing quickly.
Where do I find the official list?
In the Customs Tariff and the GST rate notifications. Our HSN finder covers chapters and common headings to point you in the right direction, but it is deliberately not a substitute for the tariff.
Is this page tax advice?
No. Classification is genuinely technical and disputes are common. Take professional advice on anything material.
Related
Keep the code with the item
tBiz remembers the HSN and rate per item, so a decision made once is applied consistently.