HSN is an abbreviation for the Harmonized System of Nomenclature. The WCO (World Customs Organization) established and industrialized HSN in 1988. Since then, five adjustments have been made all over the world. More than 5000 items are listed in the HSN code, used in more than 150 countries. This 6-digit HSN code can be used to identify over 5,000 different commodities and are also used for understanding tax for that item.. Later, Customs and Central Excise added two extra digits to the HSN code for the search to be more accurate. It is a versatile indirect tax device that is widely accepted around the world. The WCO presently monitors more than 95% of the industry.
Use of HSN Code
Following the establishment of the Goods and Services Tax (GST), India’s enactment of the HSN code puts the country on a level with other countries using HSN for years. To standardize GST, India used the HSN code. This has also reduced the cost of international trade by bringing trade processes closer together. The HSN encourages every Indian taxpayer to look into the GST rate by using the code. As a result, the system will automatically compute the GST tax rate applicable to the products, shortening and clarifying India’s trade-related techniques. As a result, the correct search for HSN codes must be considered throughout the GST Return filing process.
What happens if you use the HSN Code incorrectly?
When you declare an incorrect code as an exporter, it can cause problems with your shipment during customs inspection. Import possibilities may be denied, custom duty assessments may be high, and non-compliance penalties may be imposed, among other issues. The buyer would not be able to collect their input tax credit if they used an inaccurate HSN Code under GST. According to Section 31, an invoice must be error-free throughout the entire process, including appropriate HSN Code categorisation for declaring the input tax credit.
Relationship of HSN code and GST rate
- HSN code helps in levy and collection of GST
- HSN code helps in determining GST rate and value of tax
- It helps in filing returns under GST.
GST rate and HSN code for cereals
GST rate and HSN code for cereals fall under section 2 of chapter 10.
If the trader deals in Cereals, the HSN Code for the Cereals must be used on the invoice or in the GST Returns to identify the Cereals.
Section 2 – Chapter 10
- Items that are listed in this HSN Code’s Chapter 10 will be categorised accordingly. For instance, if grains are present, whether in the ear or on the stalk if it’s in the chapter, it will be listed.
- Grain that has been hulled or otherwise worked is not covered in this chapter.
- On the other hand, husked, milled, polished, glazed, parboiled, or broken rice remains in heading 1006.
- Sweet corn is not included in heading 1005.
HSN code for cereals including HSN Code Rice, Maize HSN Code, Wheat HSN Code
The table given below shows the different HSN codes for various cereals.
|
Description of goods |
HSN CODE |
|
wheat and meslin |
1001 |
|
Rye |
1002 |
|
Barley |
1003 |
|
Oats |
1004 |
|
Maise corn |
1005 |
|
Rice |
1006 |
|
Grain Sorghum |
1007 |
|
Buckwheat Millet and canary seeds, other cereals |
1008 |
|
Fonio |
100840 |
|
Quinoa |
100850 |
|
Triticale |
100860 |
Also Read: Effect of GST on the Indian Economy
GST tax rates for cereals
The tax rate given below includes GST Rate for Rice, GST Rate on wheat, etc.
|
Description of goods |
GST rates |
|
Wheat and Meslin Wheat and meslin packed in unit containers and: (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available, except where any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions |
5% |
|
wheat and meslin other than those stored in a single container |
Nil |
|
Rye packed in a unit container and: (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available, other than those where any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Rye other than those stored in a single container |
Nil |
|
a ) Barley packed in a unit container and a) bearing a registered brand name; or b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available, other than those where any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Barley other than those stored in a single container |
Nil |
|
Oats packed in unit containers and: (a) bearing a registered brand name; or (b) bearing a brand name for which an actionable claim or enforceable right in a court of law exists, other than those for which any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Oats other than those stored in a single container |
Nil |
|
a) Maise corn bearing a registered brand name; or b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available, other than those where any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Maise corn other than those stored in a single container |
Nil |
|
Rice packed in unit containers and: (a) bearing a registered brand name; or (b) bearing a brand name for which an actionable claim or enforceable right in a court of law exists, other than those for which any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Rice other than those stored in a single container |
Nil |
|
Grain sorghum packed in unit containers and: (a) bearing a registered brand name; or (b) bearing a brand name for which an actionable claim or enforceable right in a court of law exists, other than those for which any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Grain sorghum other than those stored in a single container |
Nil |
|
Buckwheat, millet, and canary seed; other grains including Jawar, Bajra, and Ragi are stored in a unit container, and – (a) bearing a registered brand name; or (b) bearing a brand name for which an actionable claim or enforceable right in a court of law exists, other than those for which any actionable claim or enforceable right in respect of such brand name has been voluntarily waived, subject to the conditions. |
5% |
|
Other cereals not put up in a unit container include buckwheat, millet, and canary seed; other cereals like Jawar, Bajra, and Ragi. |
Nil |
|
Fonio |
5% |
|
Quinoa |
5% |
|
Triticale |
5% |
|
Millet |
5% |
Also Read: New GST Returns – Forms, Invoices, ITC, Filing System Explained
Conclusion
The HSN system is not only beneficial to Customs agents, but it is equally important for GST. It contributes to the systematization and global acceptance of GST. There is no need to publish a full description for each GST-eligible good when using HSN codes. This enables the tax office to automate GST returns, saving time and money.
We hope the article has given you the relevant information regarding GST Rate for Rice, GST Rate on wheat, Maize HSN Code, Barley HSN Code, and HSN Code for Grains.
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