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Transportation HSN Code Understanding Harmonized System Codes


transportation hsn code

Understanding Transportation HSN Code for GST in India

The Harmonized System of Nomenclature (HSN) code is a six-digit identification code developed by the World Customs Organization (WCO) for systematic classification of goods all over the world. In India, the HSN code plays a crucial role in the Goods and Services Tax (GST) regime, classifying goods for taxation purposes to bring in uniformity and standardization. For transportation services, the HSN code helps in identifying the tax rates applicable to various types of transport-related activities.

HSN Code in Transportation
Transportation services encompass a broad range of activities, including the transport of goods and passengers via road, rail, air, and water. The HSN code for transportation varies based on the type of service provided. For instance, HSN codes are:

9965 for logistics and cargo handling services.
9966 for rental services of transport vehicles with or without operators.
9967 for supporting services in transport.
Significance of HSN Codes for Transportation Services

Tax Categorization: Helps determine the GST rates applicable to different transportation services.
Compliance: Ensures businesses are compliant with GST regulations by accurately invoicing and filing returns.
Streamlining Taxation: Facilitates the uniform application of tax rates across India for all transportation services.
GST Rates on Transportation Services
GST rates on transportation services are determined based on the HSN code. They can range from 5% to 18%, or in some cases, transportation services may be exempt from GST. For example, transportation of goods by road is typically exempt from GST, but when availed from a transporter, a 5% GST may be applicable.

Applicability of HSN Code

Businesses with an annual turnover of less than Rs. 1.5 crores are not required to mention the HSN code in their invoices.
Businesses with turnover between Rs. 1.5 crores and Rs. 5 crores use a 2-digit HSN code.
Businesses with turnover exceeding Rs. 5 crores use a 4-digit HSN code.
The HSN code serves as an essential tool in the GST framework for categorizing transportation services. It simplifies the tax determination process, enables businesses to comply with tax regulations, and ensures uniformity in the classification of transportation services across the nation. Businesses engaged in the transportation sector must understand and use the correct HSN codes to avoid discrepancies in tax filings and ensure smooth business operations.,

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