goods are classified in various category...these categories further classified in sub category and so on......hsn code is the unique number given to these category (known as chapter of hsn).....accordingly each sub category under a category also given a unique number.....this system of coding is known as harmonised system of nomenclature and it is a standard in world trade......it helps in identify a particular commodity through it's code....it is of great importance in trade, specially in cross country trade
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