About HSN Code:
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The HSN Code is a six-digit identification code. The World Customs Organization (WCO) developed this code in 1988.
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Purpose: It is an international nomenclature for the classification of products. It allows participating countries to classify traded goods on a common basis for customs purposes.
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The code is also called the universal economic language for goods. It is a multipurpose international product nomenclature.
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The HSN code currently comprises around 5,000 commodity groups. Each Code is a unique six-digit code that has numbers arranged in a legal and logical structure. There are well-defined rules to achieve uniform classification.
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Of the six digits, the first two denote the HS Chapter, the next two give the HS heading, and the last two give the HS subheading.
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Significance: HSN Code helps in harmonizing customs and trade procedures. Thus, it reduces the costs of international trade.