HSN Code and GST Rate are two commonly used codes in international trade, especially in India. If you need to import and export goods to India, especially LED displays, it is crucial to know these two codes. This article will provide you with a detailed introduction to these two types of tax information and give you suggestions to choose the correct tax data.
It is worth noting that this article is for reference only and does not constitute professional tax advice. If you have any uncertainties, it is recommended that you consult a professional customs broker.
Table of Contents
The Process of Customs Clearance for Imports and Exports in India
Export Customs Clearance Process
When you are about to carry out export customs clearance, first of all, you need to collect relevant information, including HSN Code, tax rate, and whether there are export restrictions, and prepare the corresponding export documents.
Then, submit the Shipping Bill in advance using the ICEGATE system to complete the customs declaration, and leave the port after the goods are inspected and released by customs.
Import Customs Clearance Process
Although the procedures for export customs clearance and import customs clearance are similar, the import process is stricter as it involves certifications such as tariffs, IGST, and BIS.
When importing goods, you need to prepare the HSN Code, IGST rate, product certification, and the necessary documents for the goods. Then, you need to submit the customs declaration information through the ICEGATE system and take delivery of the goods after paying the customs duties.
What is the HSN Code?
HSN stands for Harmonized System of Nomenclature. When you are engaged in import and export trade, you need to classify the goods to be transported first, and the HSN Code is a set of internationally recognized commodity classification standards, and it is usually composed of six digits.
The Indian government has expanded this standard based on its own situation. It added two digits on top of the six-digit number. It determines the tariff rate and GST rate applicable to your goods in India and whether specific licenses, such as BIS certification, are required.
In most of the documents for import and export to India, you must provide the eight-digit commodity code stipulated by the Indian government; otherwise, it will lead to the failure of customs clearance.
Why is HSN Coding so Crucial?
In the process of import and export trade, the HSN Code is quite important. It can determine the amount of tariffs and GST rates that the goods need to be subject to, as well as whether they require specific certifications or licenses. That is to say, whether the HSN Code is correct determines whether you can import and export the goods smoothly.
How to Correctly Find the HSN Code of LED Displays?
First of all, confirm the purpose, material, and working principle of your LED displays, and whether it is a semi-finished product. It should be noted that when you conduct import and export trade in India, the customs will pay more attention to the functions and uses of the products rather than their names.
For example, you need to distinguish whether the LED screen is for commercial, home, or surveillance purposes.
Then, search for official resources to find the specific HSN Code of the LED display. Obtain HSN information through official Indian inquiry channels, such as the GST Portal, World Customs Organization (WCO) handbook, and CBIC. Based on the actual application of your product, screen out the most reasonable HSN and whether it involves BIS or WPC.
After that, confirm whether the display’s HSN Code is acceptable in ICEGATE for customs clearance. This can ensure that the system can enter your HSN number and prevent your goods from being automatically intercepted and triggered for manual review.
Finally, if there is any information you are unsure about during the inquiry process, you can turn to a customs broker. A reliable customs broker can save you a lot of unnecessary trouble and help you clear customs quickly.
The HSN Code of LED Displays in India
For different types of LED displays, the corresponding eight-digit HSN codes also vary. The parts and accessories of electrical equipment are generally listed in Chapter 85 of the HSN code. That is to say, the first two digits of the HSN code for display screens are usually 85. Generally, the first four digits of the HSN Code for TV signal devices, such as LED screens, are 8528 or 8531. The following are the HSN codes of several common display screens, and you can use them as partial references:
| Products | Explanation | Common HSN Code |
| LCD/LED TVs | Television receiving devices or monitors | Heading 8528 in Chapter 85, generally 85287212 |
| Mobile Phones | A telephone used for cellular networks or other wireless networks | In Chapter 85, Most of them are 85171211 |
| Computer Monitor | Projectors without television receiving functions | The 8528 series, generally 85285900 |
| LED Video Wall | Independent display device | The 8528 series, generally 85285910 |
| Semiconductor devices | Semiconductor devices such as diodes, transistors, photosensitive devices, and light-emitting diodes (LEDs) | Heading 8541 in Chapter 85, such as 8541 5900 |
| Wires, electrodes, and other parts | The components of an LED display | There are various types, usually in Chapter 83, 84, or 85 |
What is the GST Rate in India?
GST Rate refers to Goods and Services Tax Rate, which in most cases refers to the tax system of India in international trade. Whether you are selling within India, selling across states, or importing goods, you need to pay the GST Rate. The GST tax you need to pay depends on the trade terms, Custom Duty, and HSN Code.
Generally speaking, the more essential the imported items are for daily use, the lower the GST tax rate will be. For instance, the maximum GST Rate for milk and bread is only 5%, while for luxury cars, it might be around 40%.
What are CGST, SGST, and IGST, Respectively?
In India, GST can be classified into three types: CGST, SGST, and IGST. Different transaction types correspond to different calculation methods.
CGST means Central Goods and Services Tax. It is levied by the central government and is applicable to transactions within the same state.
SGST refers to State Goods and Services Tax, and it is a state-level tax levied by the state government when transactions are conducted within a unified state. When the buyer and the seller are in the same state, they need to pay the CGST Rate and the SGST Rate simultaneously.
IGST stands for Integrated Goods and Services Tax, which is applicable to cross-state transactions or import transactions and is levied by the central government. When you conduct international trade or trade between different states in India, you need to pay the IGST Rate.
How to Query the GST Rate?
If you want to find the GST Rate corresponding to the product, you need to first confirm that the 8-digit HSN code of the product you find is correct. Different codes may have different rates. Then, enter the keywords through the GST official website to query the corresponding tax rates and save the screenshots. Also, if you are new to international trade, then you are expected to find a customs broker to handle these.
GST Rate of LED Displays and Their Parts
For display devices such as TVs and flat panel display modules with titles 8525 and 8524, the IGST Rate is generally 18%. For TV receiving devices such as LCD monitors and projectors with title 8528, the IGST Rate might be 18% or 28%.
Besides this, the IGST Rate of the components used in LED display screens, such as light-emitting diodes, cabinets, control chips, and power supplies, is generally 18% as well.
Tips for Choosing the Correct HSN Code and GST Rates
Pay Attention to the Use of the Product
As mentioned, when verifying the information of goods, Indian customs pay more attention to whether their purpose are in compliance. For instance, the HSN codes for display screens used in home TVS and those for commercial advertising are different, and the strictness of their reviews also varies. Therefore, when declaring, you need to pay attention to the product’s intended use rather than its structure or name.
Choose a Stable HSN
You are expected to choose an HSN Code that won’t cause any disputes for your product. The Code you choose should be consistent with the purpose of the product, and confirm whether it will trigger mandatory certifications such as BIS, WPC, or TEC. In addition, the Indian customs may update the HSN every year, and you also need to ensure that your HSN complies with the new regulations.
The HSN Code Must be Logically Consistent with the GST Tax Rate
In India’s GST system, each HSN Code has an official corresponding tax rate. When you are declaring customs, the item, HSN Code, and GST Rate must match; otherwise, the declaration may be rejected, or a fine will be imposed. In addition, the HSN numbers and tax rates you fill in on all documents, including Commercial Invoice, Packing List, and Customs Declaration, must be consistent.
FAQS
What Other Taxes Need to be Considered for Import and Export Customs Clearance in India?
Except for GST, you need to consider the Basic Customs Duty (BCD), Social Welfare Surcharge (SWS), Export Duty, and there are some certification costs, such as BIS certification, WPC certification fee, TEC certification fee, etc. Sometimes you also need to consider whether you can get a tax refund.
Is It Necessary to Provide the HSN Code of the Components for the Imported Full Screen?
Under normal circumstances, when importing complete LED displays, it is not necessary to provide the HSN Code for each component separately. Just provide the HSN Code of the entire machine.
However, in specific circumstances, such as when the entire screen is disassembled for shipment or when the document description is ambiguous, customs may require the HSN of the components to be provided.
Does the Display Device Need BIS Certification?
In India, some display devices require BIS (Bureau of Indian Standards) certification, such as TVs, monitors, and some integrated display devices. In most cases, indoor or outdoor LED large screens and advertising screens are usually regarded as commercial display systems and do not require BIS certification.
What Happens If the Wrong HSN Code is Used?
Generally speaking, if the HSN Code you report only has a slight difference from the correct one, the customs will only ask you to make corrections. If the HSN Code you declare affects the calculation of the tax rate, you may have to pay additional taxes and interest. In more serious cases, it may lead to the detention of your goods and heavy fines.
Can Different GST Rates Apply to One LED Display Shipment?
When the same shipment contains different types of independent goods, or some items are treated as Spare Parts, you can often calculate the tax rate using different HSN codes. However, in general, as long as the LED display constitutes a complete device functionally, it cannot be disassembled for calculation.
Final Thoughts
IvanLED is a reliable LED display supplier in China. We have over a decade of rich experience in cross-border sales, having cooperated with more than 100 countries, and are familiar with the import and export standards and procedures of each country. Besides this, we also offer real-time production monitoring, warranty, and after-sales service to ensure you have no worries about malfunctions.
If you want to customise an LED display, feel free to contact us!
