The Govt. levied taxes to their citizen to generate incomes for projects undertaking to boost the economy of the country and to hike the standard living of their citizens. The authority of Government levy taxes in India from the Constitution of India, which allots power to Levy Taxes to Central and State governments.
Recently the GST (GOODS and SERVICE TAX) was implemented in India from 1st July 2017. It is an Indirect Tax on supply of service and goods. GST is one indirect tax for entire country check the clarification in diagram below before of GST:-
After GST implementation
Goods and Services Tax (GST) will be levied on each of these stages which makes it a multi-stage tax.
Harmonized Systems of Nomenclature (HSN) it is a standardized system of name and number to classify trade products among the world. Harmonized Systems were developed by the WORLD CUSTOMS ORGANIZATION (WCO) and it came to effect in the year 1988.
It is organized logically by components material or economic activities, for examples cloths and cloths raw material in one section, animal and animals products in one section. The Harmonized Systems (HS) is divided into 21 Sections and from 21 Sections divided into 96 chapters. Now the 96 HS is divided into approx. 5,000 headings and subheadings.
Sections and Chapters are described broadly in categories of goods and headings/ subheadings are described about the products in more details. In HSN for 5,000 of products, each has been identified by a six-digit code which has been arranged in a legal and logical structure.
Under India GST the merchants should receive 2, 4 or 8 digits no’s of HSN code for their product, the term for the earlier year:
- Business having the turnover not more than ₹1.5 Corers will not be required for use HSN codes
- Business having the turnover of between ₹1.5 Corers and ₹5 Corers should have to use 2 digits HSN code.
- Business having the turnover of ₹5 Cores or more should have to use 4 digits HSN code.
- In the instance of Imports/exports in HSN code of 8 digits might mandatory, as GST be perfect with worldwide models.
- The HSN code can be download for business on the GST site.
- HSN is specified in Invoice and said in the GST expense from the point of view and it will be transformed on the GST entrance.
- For small merchants under organization plan won’t be required to say HSN codes in their invoice.
- HSN will be specified in invoice and said in the GST expense from the point of interest, which will be transferred on the GST entrance.