The Effect of HS Code Changes in 2022 on Indian Businesses

The Harmonized Commodity Description and Coding System, which is an international standard, is the foundation of the HSN codes, which classifies products. Although this system includes many different goods and services and gives each one a standard code, it must be changed every five years due to the development of new goods and services. All 200 members of the international community have been impacted since the latest update, which happened in late 2021. The Harmonized System (HS) is governed by ‘The International Convention on the Harmonized Commodity Description and Coding System’. In this article, we will discuss the effect of HS Codes changes in 2022 on Indian businesses.

Understand about HS Codes

The World Customs Organization created the Harmonized Commodity Description and Coding System, sometimes known as "Harmonized System" or just "HS," which is a multipurpose worldwide product nomenclature (WCO). It includes about 5,000 commodity groups; each identified by a six digit code, arranged in a legal and logical structure and is supported by well-defined rules to gain uniform classification. The HS Codes helps to harmonise trade and customs procedures as well as the non-documentary trade data exchange associated with such procedures, which lowers the costs associated with global trade.

The Effect of HS Code Changes in 2022 on Indian Businesses

Operations are anticipated to be impacted for the first few months until the database portal is updated with the new improvements. For the purpose of facilitating the transfer, the Central Board for Indirect Taxes and Customs (CBIC) has already begun training officers stationed at inland container terminals, land crossings, international airports, and seaports. The greater concern, though, is how the HS codes would affect the submission of the Goods and Services Tax (GST). The correct HS codes must currently be used in order to submit GST invoices. Organisations are essentially breaking the law if their GST invoice lacks the correct HS code.

India has therefore made it mandatory to include the first four digits of the HS code on domestic B2B transactions under Rs.5 crore and the first six digits on transactions beyond Rs.5 crore.

Organisations now desperately need automated solutions to assist with precise product categorisation. The firm will be sure to stay informed of all changes to the HS code system, both in India and outside, by using automated classification systems. Additionally, by automating the process of adding the appropriate HS code to the GST invoice, it will guarantee reliable trade documentation.

What has changed with the Customs Tariff Act of India?

India has implemented 351 changes at the six-digit level and added more than 1,000 new tariff categories to replace the 347 ones that were previously in existence. Additionally, India has announced the addition of new justifications and exclusions as well as the reorganisation of tariff categories within the same chapter. Modifications to the classification of commodities, tariff rates, and benefits claimed under free trade agreements (FTAs), and other things are among the latest modifications. 

Obtain HSN Codes by Seair Exim Solutions

Based on minute observations, Seair Exim Solutions' hand-in and latest international trade data has helped thousands of export businesses increase sales. You can search Indian Hs code to see what is in demand there. In a similar line, using data to speed up the export business process. It allows you to access data on the top exporters, HS Codes, export import statistics, product descriptions, export pricing indices, etc. Get reliable Import Export Data and obtain precise, thorough  HSN Codes of all products and to learn about the many prospects in the import-export sector.
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