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Taxpayers with a turnover below Rs. 1.5 crore are exempt from this requirement. HSN Code is not required for taxpayers with a turnover below Rs. 1.5 crores. HSN Code is not required for taxpayers whose turnover exceeds Rs.1.5 crores, but less than Rs. 5-Crillion taxpayers will use 2-digit code, while taxpayers with a turnover of Rs.1.5 crores or less shall use 4-digit code. Taxpayers whose turnover exceeds Rs.1.5 crores but below Rs. 5-digit code shall be used by 5 crores or more. The goods can also be made from raw materials or imported. The nature of the goods is not changed by traders. In general, the classification will follow the HSN declaration by either the manufacturer or importer, who have both used the system in the past.