Every industrial chemical bought or sold in India is classified under an HSN (Harmonized System of Nomenclature) code, which in turn generally determines the applicable GST rate. This guide explains the concept — for the current code and rate on a specific product, always confirm with the GST portal, a customs broker, or your finance team, since classifications and rates are set and revised by the government, not by suppliers.
What an HSN Code Is For
HSN codes are an internationally standardised product classification system, adapted for India's GST regime. Chapter 28 and 29 of the HSN broadly cover inorganic and organic chemicals respectively, with more specific chapters and headings for particular product families — but the exact code for any given product depends on its precise chemical composition and form, which is why guessing from a product name alone isn't reliable.
Why the Exact Code Matters
The HSN code determines the GST rate charged on the transaction and is required on invoices above the applicable turnover threshold. An incorrect code on a purchase or sales invoice can create mismatches during GST return filing and input tax credit claims — it's a compliance detail worth getting right at source rather than correcting later.
What to Ask For and Confirm
Ask your supplier for the HSN code and GST rate applied on your invoice, and cross-check it against the current GST rate schedule or with your accountant if the purchase value is significant or the classification seems ambiguous. Because rates and classifications are revised from time to time by government notification, treat any code or rate as current-as-of-invoice-date rather than a permanent fact to memorise.