The following document was updated on July 07, 2017

In GST Tax Regime, tax is defined using the HSN code.HSN (Homogeneous System Nomenclature) is meant for identifying a particular product at the global level. It does not identify a brand or value of the product; it is the categorization of the product. For easy understanding, it is based on generic names, at times. In the present scenario, you need to mention the HSN Code in invoice as per the following:-

Up to 1.5 Cr Turnover, Not required

Above 1.5 Cr and Upto 5 Cr Turnover  2 digit HSN Code

Above 5 Cr Turnover  4 digit HSN Code

For exporters and importers: 8 digit HSN Code

HSN Code first two-digit denotes chapter; next two digits denote subchapter. Next two digits (5th and 6th) denotes category and (7th and 8th) denotes subcategory of products.

Common 4 digit HSN Codes for Pharmaceutical trade are:

3004  for selected pharmaceutical combinations (including Ayurvedic/Unani etc.) (5% tax)

3004  for selected pharmaceutical combinations (12% tax)

3006 for contraceptive pills (0% tax)

4014 for contraceptives (0%)

9021 for Orthopedic Products/Bandage etc. (12%)

9018 for BP machine etc. (12%)

2106 for selected Food Products (18%)

2106 for selected Food Products (28%)

3401 for medicated soap (18%)

9025 for Surgical equipment (18%)

3401 for Cosmetic Products (28%) 

Please refer to a tax consultant or www.cbec.gov.in for finding out actual tax rate. Above information is only indicative and for guidance only. No legal validity.

How to update HSN Codes

We have provided default HSN Master, which is created when you run menu option 

System->GST Updates-> Update GST Tax Master

(You can run this option again if you do not see GST tax codes or HSN codes in HSN Master)

If you need any HSN Code, which does not exist there, please feel free to add the same.

We have placed default HSN Code in Product master as Tax codes which are wrong, and you need to replace them with proper HSN Code. If you have turnover less than 1,5 cr, you may not need to update HSN codes. You may continue with GST00, GST05, GST12, GST18, GST28 which are wrong HSN codes and must not be printed on the invoice. They will help in updating proper tax codes in product master.

If you want to update HSN code by modifying each product manually, you can do the same, but we have better options for you in Systemn->GST Updates menu;

1, Update product HSN by selecting master group/group/products then specify HSN, update all HSN, rectify if required and finally select UPDATE HSN to update selected HSN for all selected products in HSN master. This is more useful when you want to update 4 digit HSN code in multiple products.

2. Import Company Product HSN file and update all HSN for a particular master group by mapping product names against each product name. This option will allow you to import the price list of the company also.

3. Import AWACS HSN file. If you have been providing data to AWACS, you may get this file from your login on AWACS web site. It is already mapped and most convenient way to update HSN in your product master. We do not take any responsibility for the accuracy of AWACS mapping. You should contact AWACS directly for the same.

4. Import HSN using UPC file. We have provided a UPC file (received from AWACS) containing more than 1.5 lac products, and you may use the same to update HSN in your product master.

We have provided maximum options to update HSN. We shall launch a chargeable service next month to provide HSN for retail customers as well.