Is there a difference between an HSN and an HS code?

HSN Codes are similar to Harmonised System Codes (HS Codes) in shipping. In India, it is commonly referred to as the HSN. For imports and exports of goods, each HSN code consists of six digits. To ensure higher levels of accuracy during customs checks, the code in India has been extended to eight digits. By using the HSN code list, Goods and Service Tax (GST) and Value Added Tax (VAT) can be calculated accurately in India. 

How does HSN work?

A broad class of goods is represented by 21 sections of the HSN Code structure. Each section is further divided into 99 chapters that correspond to specific product types. The chapters are further categorized into 1,244 headings and subsequently divided into 5,224 subheadings to narrow down to a specific type of goods. For example, is the HSN code for “Roasted Chana.”  In this case, ’19’ stands for the Chapter, ’04’ for the Section, ’10’ for the subheading, and ’90’ stands for the tariff item.

What is the use of HSN in India? 

For businesses to determine the correct GST rate, most goods are classified by the HSN Code list in India. The HSN Codes must also be inserted in invoices for goods and services, and a HSN Summary must be provided when filing a GST return.

HSN Codes are critical to any business that imports from or exports to India. If you don’t have the HSN Code for your products, you can use an online HSN code finder or HSN code list.

When using the HSN code, what should Malaysian exporters keep in mind? 

In Malaysia, exporters often make mistakes when using the HS code or HSN code for exporting goods that can snowball into unexpected consequences. Among other things, exporters use the wrong product classification and do not verify the information provided by custom brokers and received by them. Moreover, many companies fail to take advantage of free trade privileges because they don’t keep up with tariff law changes.

Sometimes, exporters are slapped with fines or have their goods seized as a result of these mistakes. These mistakes can also result in delays in customs, denials of export privileges, overpayments or underpayments of custom duties. 

In order to prevent these problems, exporters must classify their goods based on accurate cargo descriptions and include HS Codes on their Bill of Lading (B/L). Trades can be processed more efficiently if exporters and customs offices provide error-free information. 

For importers and exporters in Malaysia to ensure smooth imports and exports, understanding the HSN code is essential.

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