Implement Harmonized System Nomenclature Codes (HSN)

The Harmonized Commodity Description and Coding System, also known as the Harmonized System Nomenclature (HSN) is an internationally standardized system of names and numbers used to classify trade products.

In some countries, the tax legislation follows the HSN coding system to drive the GST and reporting.

Here's a case study:

Vision Corporation wholesaler sells confectionery products. The GST compliance mandate is to adopt four digit HSN codes for their commodities. The tax rate applicability is based on the HSN code.

This table shows the commodity, HSN code, and applicable tax rates for the sample HSN.

Commodity	HSN Code	Applicable GST Rate
Rusk and Toast	1905	5%
Pasta	1902	18%
Wafers	1905	18%
Baking Powder	2102	12%
Snacks	2106	12%