India uses an 8-digit Harmonized System of Nomenclature (HSN) code for classifying goods imported and exported. This numerical system facilitates trade by providing a standardized way to identify products. The first six digits of the HSN code are universally recognized, ensuring consistency across countries. For instance, the HSN code for a computer is 847141 globally. This uniformity simplifies international trade documentation and communication.
While the first six digits are consistent, the last two digits can vary depending on the specific country. This creates a country-specific code often referred to as the Exim Code. The Exim code, issued by the Directorate General of Foreign Trade (DGFT) in India, further refines the classification for import and export purposes within the country. The Brussels Tariff Nomenclature (BTN) is another 8-digit system used worldwide for customs classification, sharing the same first six digits with the HSN system but potentially having different last two digits.
Accurate classification is crucial for determining import duties, applicable regulations, and even the permissibility of importing certain goods. Incorrect classification can lead to disputes between importers/exporters and customs authorities, resulting in delays, penalties, or even rejection of shipments. Therefore, understanding the HSN coding system and ensuring proper classification of imported products is vital for smooth and compliant import operations.