Summary: With freight charges HSN code, it is quite easy to classify the charges incurred during the goods transportation from one destination to another. Keep on reading this article to learn about these codes in detail below.
The Harmonized System of Nomenclature (HSN) plays an important role in both domestic and international trade by providing a standardized classification system for goods.
While often associated with tangible products, the system is equally essential to address the classification of services, such as freight charges. In this context, assigning the correct HSN code to freight charges becomes a key aspect of customs documentation and trade compliance.
In this article, we will learn more about the HSN code for freight and how does it work.
What is Meant by the HSN Code of Freight Charges?
HSN Code is a standardized way of classifying goods and services into different categories. This code is used for classifying goods and services for taxation including custom duties. Freight charges also come under the Harmonized System of Nomenclature code. The HSN Code for freight charges is 9965.
How is the HSN Code of Freight Charges Used?
The freight HSN codes can be used in a plenty of ways like it is used to decide custom duties on freight charges, or GST rates applicable on them. Moreover, it is also used in bills to record freight charges.
- Custom Duties: Custom duties are imposed on the goods that are imported and exported. It is utilized to decide the custom duties that need to be imposed on freight charges.
- GST: In India, Goods and Services Tax is levied on the goods and services supply. It is utilized to determine the GST rate that will be imposed on freight costing.
- Documentation: U is used in several documents like bills and invoices to classify and record all the freight charges.
Comprehending the HSN Code of Freight Charges
Freight charges are the costs of transporting goods from one destination to another. These charges comprise several other costs like transportation fees, handling charges, insurance, or any other expense incurred during the transportation of goods. HSN Code for freight charges is utilized to classify the mentioned charges within a standardized system.
HSN Code of Freight for GST Software Users
GST software can be of great help for users to pay GST on freight charges. For example, it determines the taxable base for freight charges, considering any exemptions or exclusions in accordance with GST regulations. This ensures that you are paying the correct tax amount.
Moreover, GST software automatically traces freight-related GST transactions and imports them directly into the GST returns. This simplifies return filing and reduces the chance of omissions or data discrepancies.
Here are some of the most popular and widely used GST software that you can use for paying GST on freight charges in India.
Conclusion
Assigning the appropriate Harmonized System of Nomenclature code for freight charges is crucial for accurate classification and smooth international trade transactions. Properly categorizing these charges ensures compliance with customs regulations and facilitates transparent communication between trading partners.
Moreover, it also assists in staying compliant with tax regulations and ensuring the correct custom duties and GST is imposed on the freight charges.
FAQs Related to Freight Charges HSN Code
What is the difference between HSN Code and SAC Code?
The HSN code freight charges are used to classify the charges incurred during the transportation of goods, whereas the SAC Code is utilized to classify services.
How is the HSN Code of Freight Charges determined?
That is decided upon the nature of charges incurred during the transportation of goods.
Can the HSN Code of Freight Charges change?
Yes, HSN for freight charges could change if there is a change in the tax rules and regulations.
Is the HSN Code of Freight Charges used only for international trade?
No, it is used for both domestic and international trade.
Who is responsible for determining the HSN Code of Freight Charges?
The importer and exporter of goods and services is responsible for determining the HSN Code of freight charges.
What is the GST rate for freight charges HSN code 9965?
The GST rate for freight charges HSN code 9965 is 12%.
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Written by
Varsha 
Varsha is an experienced content writer at Techjockey. She has been writing since 2021 and has covered several industries in her writing like fashion, technology, automobile, interior design, etc. Over the span of 1 year, she has written 100+ blogs focusing on security, finance, accounts, inventory, human resources,... Read more
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