What is the Full Form of HSN in GST?
HSN full form in GST is Harmonized System of Nomenclature. The concept of HSN codes isn’t something new, this concept first came into existence in 1988 when the World Customs Organization (WCO) introduced HSN codes as a classification system for goods. In 2021, it became mandatory for businesses in India that have more than 5 crore turnover to furnish the HSN codes. Basically, the HSN codes are required for the proper classification of goods and services. This way anyone can tell which goods came from which specific region of a country. HSN codes aren’t just used domestically, they also help in the classification of goods on the international level trades as well.
What Else Should You Know About HSN Codes?
There are currently more than 200 countries in the world that follow the HSN codes for the classification of goods and services. Harmonized Systems of Nomenclature or HSN codes are quite important and necessary measures for global trade statistics. For domestic trades, HSN codes are usually less than 6 digits, but for international trades, businesses use 8-digit codes. But businesses that have less than 1.5 crore turnover annually do not need to use the HSN codes to classify their goods and services.