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1. Harmonized System of Nomenclature, or HSN, was conceived and developed by the World Customs Organization (WCO) with the vision of classifying goods from all over the World in a systematic and logical manner.
2. HSN is widespread and is adopted in more than 200 countries, covering a staggering 98% of goods in the World.
3. It is by far, the best logical system of classification and identification adopted in International Trade.
4. India has already been using HSN system since 1986 in the Central Excise and Customs regime.
5. It is a crucial feature to analyze the movement of goods across the World.
6. These set of defined rules is used for taxation purposes in identifying the rate of tax applicable to a product in a country.
7. It has helped in reducing efforts and costs related to complex procedures of International Trade.
8. India is all set to have its very own Goods & Services Tax or GST, which applies to all goods and services alike.
9. Indian manufacturers under GST shall be required to follow a 3-tiered structure of HSN.
10. It is also used to determine the quantum of product exported or imported in and out of a country.
11. It is a combination of different sections, further drilled down to chapters, which are further classified into headings and sub-headings.
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