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:
|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||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|
|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|
|8||Methylphosphonic acid with ( aminoiminomethyl) urea ( 1: 1)||29313800|
|9||Sodium 3-(trihydroxysilyl) propyl methylphosphonate||29313400|
|12||2-(N,N-Dimethylamino) ethylchloride hydrochloride||29211200|
|13||2-(N,N-Diethylamino) ethylchloride hydrochloride||29211300|
|16||Bis (2-hydroxyethyl) sulfide||29307000|
|18||Product from the reaction of Methylphosphonic acid and l,3,5-Triazine-2,4,6- triamine||As applicable|
|21||3,9-Dimethyl-2,4,8,10-tetraoxa-3,9-diphosphaspiro [5.5] undecane 3,9- dioxide||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|