16 Bullet Points to be taken care of while implementing HSN digits from the new financial year 2021-22
A major change for which the businesses have to gear up starting 01st April 2021 is mentioning of HSN codes on all the tax invoices.
Major points to be considered for this new provision are as below:
1. The change is an extension of the amendment made in Notification 12/2017-Central Tax through Notification No. 78/2020 dated 15/12/2020.
| 2. For turnover up to 5 crores : | HSN Digits |
| If supply made to registered person | 4 |
| If supply made to unregistered person | NIL |
3. For turnover more than 5 crores :
| If supply made to registered person | 6 |
| If supply made to unregistered person | 6 |
4. For exporters :
| If supply made to registered person | 8 |
| If supply made to unregistered person | 8 |
5. It’s optional to show HSN codes in B2C invoices for turnover below 5 crores as per point no 2 above.
6. The 49 chemicals as specified in the enclosed Annexure have to be mandatorily shown under 8 digits as per Notification no. 90/2020 dated 01st December 2020.
7. It is mandatory to report minimum digits as per points 3, 4 and 5 above in Table 12 of GSTR 1.
8. It is mandatory to report minimum digits as per points 3, 4 and 5 above in Tax Invoices also.
9. The digits of HSN codes will have to be reported based on the aggregate turnover of the preceding financial year.
10. Mention of these 8 digits HSN on the export invoices is a requirement under Foreign Trade Policy.
11. Mention of these 8 digits ITC (HS) on the export invoices is also a requirement under Foreign Trade Policy and not under Gst framework.
12. The tax rates need to be taken care of since different items with some differences in composition of the items carry different HSN digits.
13. All the tax invoices should contain HSN digits, description of goods and tax rates specifically for better transparency and avoid any future litigations.
14. The minor description change completely changes the tax rate and the HSN codes. The detailed description as per point 12 above will prove to be a bona fide disclosure in case of any litigations or confusions.
15. The Govt. is implementing Text Miningthrough ADVAIT in the GST Regulatory Framework, it will become really easy for the Department to track HSN mismatches and mistakes in Tax Invoices, GSTR 1, GSTR 9, E Way Bill, AOC 4, Cost Audit Report, Registration Certificate, Shipping Bill and Bill of Entry and issue notices for penalizing Businesses automatically.
16. There is also a fine of Rs. 50,000 for committing a mistake related to this particular scenario under section 125 of the GST.
Specified Chemical Attract HSN Digit 8 in Tax Invoice
| S. No. | Chemical name | HSN Code |
| (1) | (2) | (3) |
| 1 | Mixture of (5-ethyl-2-methyl-2-oxido-1,3,2- dioxaphosphinan-5-yl) methyl methyl methylphosphonate (CAS RN 41203-81-0) and Bis [(5-Ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl)methyl] methylphosphonate (CAS RN42595-45-9) | 38249100 |
| 2 | Dimethyl propylphosphonate | 29313200 |
| 3 | (5-Ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl) methy lmethy l methy l phosphonate | 29313600 |
| 4 | Bis[(5-Ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl)methyl ] methy l phosphonate | 29313700 |
| 5 | 2,4,6-Tripropyl-1,3,5,2,4,6-trioxatriphosphinane 2,4,6-trioxide | 29313500 |
| 6 | Dimethyl methylphosphonate | 29313100 |
| 7 | Diethyl ethylphosphonate | 29313300 |
| 8 | Methylphosphonic acid with ( aminoiminomethyl) urea ( 1: 1) | 29313800 |
| 9 | Sodium 3-(trihydroxysilyl) propyl methylphosphonate | 29313400 |
| 10 | 2,2-Diphenyl-2-hydroxyacetic acid | 29181700 |
| 11 | 2-(N,N-Diisopropylamino) hydrochloride | 29211400 |
| 12 | 2-(N,N-Dimethylamino) ethylchloride hydrochloride | 29211200 |
| 13 | 2-(N,N-Diethylamino) ethylchloride hydrochloride | 29211300 |
| 14 | 2-(N,N-Diisopropylamino) ethanol | 29221800 |
| 15 | 2-(N,N-Diethylamino) ethanethiol | 29306000 |
| 16 | Bis (2-hydroxyethyl) sulfide | 29307000 |
| 17 | 2-(N,N-Dimethylamino) ethanethiol | 29309092 |
| 18 | Product from the reaction of Methylphosphonic acid and l,3,5-Triazine-2,4,6- triamine | As applicable |
| 19 | 3-Quinuclidinol | 29333930 |
| 20 | R-(- )-3-Quinuclidinol | 29333930 |
| 21 | 3,9-Dimethyl-2,4,8,10-tetraoxa-3,9-diphosphaspiro [5.5] undecane 3,9- dioxide | 29313900 |
| 22 | Propylphosphonic dichloride | 29313900 |
| 23 | Methylphosphonic dichloride | 29313900 |
| 24 | Diphenyl methylphosphonate | 29313900 |
| 25 | O-(3-chloropropyl)O-[4-nitro-3-(trifluoromethyl)phenyl] methylphosphonothionate | 29313900 |
| 26 | Methylphosphonic acid | 29313900 |
| 27 | Product from the reaction of methylphosphonic acid and 1,2-ethanediamine | As applicable |
| 28 | Phosphonic acid, methyl-, polyglycol ester (Exolit OP 560 TP) | 38249900 |
| 29 | Phosphonic acid, methyl-, polyglycol ester (Exolit OP 560) | 38249900 |
| 30 | Bis (polyoxyethylene) methylphosphonate | 39072090 |
| 31 | Poly(1,3-phenylene methyl phosphonate) | 39119090 |
| 32 | Dimethylmethylphosphonate, polymer with oxirane and phosphorus oxide | 38249900 |
| 33. | Carbonyl dichloride | 28121100 |
| 34. | Cyanogen chloride | 28531000 |
| 35. | Hydrogen cyanide | 28111200 |
| 36. | Trichloronitromethane | 29049100 |
| 37. | Phosphorus oxychloride | 28121200 |
| 38. | Phosphorus trichloride | 28121300 |
| 39. | Phosphorus pentachloride | 28121400 |
| 40. | Trimethyl phosphite | 29202300 |
| 41. | Triethyl phosphite | 29202400 |
| 42. | Dimethyl phosphite | 29202100 |
| 43. | Diethyl phosphite | 29202200 |
| 44. | Sulfur monochloride | 28121500 |
| 45. | Sulfur dichloride | 28121600 |
| 46. | Thionyl chloride | 28121700 |
| 47. | Ethyldiethanolamine | 29221720 |
| 48. | Methyldiethanolamine | 29221710 |
| 49. | Triethanolamine | 29221500 |
Author Bio
Is it mandatory to mention 4 digit HSN Code for B to C invoice turnover less than 2 crore n simultaneously is it mandatory to file HSN wise summary sale in GSTR I return
Can I use 8 digit HSN code other than export invoices.
Sir iss list mein paper ke liye nahi hai
Dear sir,
We have facing some problem in 6 digit HSN code our turnover is around 100cr. in some 6 digit HSN e-invoice portal says invalid and in some e-way bill says invalid.
please suggest can we make 8 digit hsn invoice we have also export some product.
REQIRED LIST OF 6 DIGIT HSN CODE
IF POSSIBLE PLEASE PROVIDE
OR
GUIDE WHERE I CAN GET IT
Pls refer this article, it might help you :
https://taxguru.in/goods-and-service-tax/hsnsac-code-issuing-invoices-wef-01-04-2021.html
Very nice information thanks for sharing
thanks for the appreciation,
everyone needs to gear up and set the software and systems to adopt this change before the timeline
Our sales are below 5cr what is rule for us
4 digits HSN for Gst turnover/ sales below 5 crores as mentioned above
4 digits for gst turnover below 5 crores as explained in the article
Are the above provisions same for SAC code implementations also for service provider??
yes, the rules are similar for SAC and HSN
similar rules for HSN and SAC in case of service providers