If you're involved in the world of business, especially in India, you've likely come across the term "HSN code." HSN, which stands for Harmonised System of Nomenclature. This HSN system was introduced to simplify the process of categorizing goods and services, making it more efficient for businesses to comply with tax regulations. Initially, HSN codes in India consisted of six digits and were used to classify commodities for customs and central excise purposes. However, to ensure a more precise classification, an additional two digits were introduced, making it an 8-digit unique code.
Chapter 8 of the GST Act plays a pivotal role in defining the provisions and GST rates related to edible fruits and nuts, peels of citrus fruit or melons, and vegetables. It's a chapter that concerns many businesses, particularly those dealing with dry fruits. HSN code 801 and HSN code 802 fall under this category, and understanding these codes is crucial for proper tax compliance.
In the context of HSN code 801, it pertains specifically to goods like coconuts, Brazil nuts, and cashew nuts, whether fresh or dried and with or without shells or peels. This classification aids in determining the applicable GST rates for these products. For instance, the HSN code for dried makhana, whether shelled or peeled, is 08013100, with a corresponding GST rate of 5%.
Properly comprehending the components of GST, namely Integrated Goods and Services Tax (IGST), Central Goods and Services Tax (CGST), and State Goods and Services Tax (SGST), is imperative when dealing with HSN codes:
Integrated Goods and Services Tax is equal to the GST rate. If the GST rate is 12%, IGST will also be 12% for the respective transaction.
Central Goods and Services Tax accounts for half of the GST rate. With a GST rate of 12%, CGST will be 6%.
State Goods and Services Tax also amounts to half of the GST rate. In the case of a 12% GST rate, SGST will be 6%.
Comprehending these components is fundamental for ensuring precise tax compliance when dealing with HSN code 801 and other relevant HSN codes.
In conclusion, HSN code 801 holds significant importance in the framework of GST in India, particularly concerning the taxation of products like coconuts, Brazil nuts, and cashew nuts. It simplifies the classification and taxation process, aiding businesses in adhering to their tax obligations accurately.