HSN codes, or Harmonized System of Nomenclature codes, are a standardised system of names and numbers used to classify goods in international trade. HSN codes streamline global trade by ensuring consistent product classification and help in tax collection and data analysis.
What is the HSN code?
| Aspect | Description |
| Definition | The Harmonized System of Nomenclature (HSN) is an internationally accepted method of classifying goods. |
| Purpose | It is designed to facilitate international trade by standardising the classification of products. |
| Structure | The HSN code comprises 6 to 8 digits. The first two digits represent the chapter, the next two indicate the heading, and the last two denote the subheading. |
| Usage | Used in tax invoices, GST returns, and import-export documentation to classify goods accurately. |
| Benefits | Ensures uniformity in classification, aids in the systematic collection of tax, and reduces ambiguities in understanding product categories. |
Rice HSN code and GST rate in India
HS Code |
Description |
GST Rate |
1006 |
Rice in the husk (paddy or rough): of seed quality |
0% |
100610 |
Rice in the husk (paddy or rough): of seed quality |
0% |
10061010 |
Rice in the husk (paddy or rough): of seed quality |
0% |
10061090 |
Rice in the husk (paddy or rough): other |
0% |
100620 |
Husked (brown) rice |
0% |
10062000 |
Husked (brown) rice |
0% |
10063020 |
Semi-milled or wholly-milled rice, whether or not polished or glazed: basmati rice |
0% |
100640 |
Broken rice |
0% |
HSN code for rice in India
| Aspect | Description |
| HSN code | 1006 |
| Description | The HSN code 1006 covers all types of rice, including brown rice, semi-milled or wholly milled rice, and broken rice. |
| Subcategories | - 1006.10: Rice in the husk (paddy or rough)- 1006.20: Husked (brown) rice- 1006.30: Semi-milled or wholly milled rice- 1006.40: Broken rice |
| GST rates | - Nil for rice in the husk, husked (brown) rice, and semi-milled or wholly milled rice, provided they are not branded or put up in unit containers- 5% for branded or packed rice |
| Importance | Accurate classification under the HSN code ensures proper taxation and compliance with GST regulations. |
| Export/import | Facilitates easy identification and classification during international trade, helping in the smooth export and import of rice. |
Why is the HSN code for rice important?
| Reason | Explanation |
| Uniformity in classification | The HSN code provides a uniform system for classifying rice, ensuring consistency across regions and countries. |
| Tax compliance | Helps businesses adhere to GST regulations, avoiding penalties and ensuring proper tax payments. |
| Simplifies trade procedures | Facilitates smoother customs processes and international trade by providing a standard classification. |
| Data collection and analysis | Aids in the systematic collection of trade data, helping in the analysis of import and export statistics. |
| Prevents ambiguities | Reduces misunderstandings and disputes related to product classification and tax rates. |
| Ease of business operations | Streamlines the process of preparing tax invoices and filing GST returns, enhancing operational efficiency. |
| Legal compliance | Ensures that businesses comply with local and international trade laws, avoiding legal complications. |
| Trade facilitation | Assists in the identification of applicable tariffs and trade policies, promoting smoother business transactions. |
Understanding HSN codes for rice
- Definition and structure: The HSN code for rice (1006) is an internationally recognised classification used for all rice types. It includes specific subcategories for different rice forms such as husked, semi-milled, and broken rice.
- Taxation: The GST rates applicable to rice vary based on its classification under the HSN code. For instance, non-branded rice in the husk, husked rice, and milled rice attract no GST, while branded or packed rice attracts a 5% GST.
- Trade and export: The HSN code simplifies the process of exporting and importing rice by providing a clear, standard classification that is recognised globally. This facilitates smoother customs clearance and adherence to international trade standards.
- Business operations: For businesses dealing in rice, using the correct HSN code in invoices and GST returns ensures compliance with tax regulations and avoids potential fines. It also streamlines inventory management and accounting processes.
- Data analysis: Governments and organisations use HSN codes to collect and analyse trade data. This helps in understanding market trends, import-export balances, and the economic impact of the rice trade.
Conclusion
Understanding and correctly applying the HSN code for rice is crucial for businesses involved in the rice trade. It ensures compliance with GST regulations, facilitates international trade, and simplifies business operations. Using the correct HSN code not only helps avoid legal complications but also aids in the efficient management of business transactions.
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