What is an HSN code in the context of GST?

An HSN (Harmonized System of Nomenclature) code is a globally recognized system for classifying goods. In the context of GST (Goods and Services Tax) in India, HSN codes are used to categorize products for taxation purposes, ensuring uniformity in tax rates across the country. 

Under GST, businesses must use HSN codes when filing tax returns and issuing invoices. The number of digits in an HSN code varies based on a business’s turnover:
 

• 4-digit HSN – For businesses with turnover up to ₹5 crore. B2C (optional)
   
• 6-digit HSN – For businesses with turnover above ₹5 crore.– B2B
   
• 8-digit HSN – Used for international trade.

Using the correct HSN code helps determine the applicable GST rate for a product.