HSN (Harmonized System of Nomenclature) Code is a globally standardized classification code for goods, used in India to determine GST rates. It is 4, 6, or 8 digits depending on turnover and export use.
Why It Matters
The HSN code drives the GST rate on every product you sell or move. Wrong HSN means wrong tax, mismatched GSTR returns, and buyer rejections. Businesses above INR 5 crore turnover must use 6-digit HSN on all B2B invoices, and 8-digit for exports. HSN is mandatory on invoices, e-invoices, e-way bills, and returns.
Example with Indian Context
A machined steel bolt is classified under HSN 7318 (chapter 73 covers iron and steel articles, heading 18 covers screws and bolts). Inside that, the 8-digit code 73181500 is for bolts and screws with hexagon heads. GST rate for HSN 7318 is 18 percent. If a manufacturer wrongly classifies the same bolt under HSN 8708 (motor vehicle parts) at 28 percent, buyers will flag the invoice.
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How ERPDrive Handles It
Every item master in ERPDrive stores HSN and GST rate. Invoices, e-invoices, e-way bills, and ITC-04 automatically pick up the right code. The HSN summary for GSTR-1 is generated with one click at month-end.
See It in Your Factory
ERPDrive handles HSN classification as a first-class workflow alongside BOM, MRP, quality, and GST. Book a 30-minute demo.
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