Clarification on reporting 4-digit/6-digit HSNs

GST helpdesk is in receipt of some tickets at helpdesk wherein it was reported that certain 6-digit HSN codes are not available in HSN Master/ not accepted on e-invoice/e-Way bill portals.

Background: Notification No. 12/2017-Central Tax dated June 28, 2017, as amended vide Notification No. 78/2020 – Central Tax, dated October 15, 2020, mandates taxpayers to declare specified digits, as follows, of Harmonised System of Nomenclature (HSN) / Service Accounting Code (SAC) Code on raising of tax invoices, w.e.f. April 1, 2021.

S. No. Aggregate Turnover in the preceding Financial Year Number of Digits of HSN Code
1. Upto INR 5 crores 4
2. More than INR 5 crores 6

It may be noted that specific 6-digit HSNs, as available in the HSN/Customs Tariff (with corresponding description of goods) are allowed in the system. It also follows that the declaration of HSN at 4/6 Digits has to be out of valid HSN codes only.  

However, there are instances that some taxpayers are trying to report truncated first 6-digits out of an otherwise valid 8-digit HSN; which are actually not available in Tariff at 6-digit level and with no corresponding description of goods; these are invalid and hence not being allowed in the System.

Taxpayers may, therefore note that based on the harmonious interpretation of the Notifications, as referred above, read with Customs Tariff Act, 1975, as made applicable to GST; the number of digits of HSN, as specified vide Notifications No. 12/2017 & 78/2020 (Central Tax), are the minimum number of digits of HSN to be mentioned on the invoice.

Example: Where HSN 6 digits are specified to be reported in invoice, valid HSN codes as available in tariff, at both 6-digits and 8-digits can be mentioned. Similarly, where HSN at 4-digits are specified, valid HSN codes as available in tariff, at 4-digit, 6-digit and 8-digit can be mentioned. However, the 4/6 Digit HSN Codes, which are not available in the tariff; along with specific description, Unit and GST Rate; are not allowed to be mentioned.

Further, if the HSN of any Goods/Service is otherwise valid but not accepted on GST Portal / e-invoice Portal / e-way Bill portal, please raise a ticket on GST Self-Service Portal: https://selfservice.gstsystem.in/ > Report Issue > Type ‘HSN’ in ‘Type of Issue/Concern’ search box > Select relevant sub-category, e.g. ‘e-Invoice – IRP – HSN Code related’ 

Thanking You,

Team GSTN | 12/04/2021

More Under Goods and Services Tax

10 Comments

  1. Basavaraju says:

    We are dealing in Cloths (Article of apparel and clothing accessories or cap/topi, knitted or crocheted, of sale value not exceeding Rs 1000 per piece) where GST department itself has given 2 Digit HSN Code. How do I can take 6 or 8 Digit in this case.

  2. B N NAGESH says:

    Hsn code of six digits from April 2021 become mandatory for raising tax invoices under gst. At the same time linked to harmonized system nomenclature earlier headed by customs central excise, service tax department s does upon introduction of gst & new notification for compulsory mentioning of six digits department has made circus of verified with generation einvoice/ tax invoices for implementation- answer

  3. Pawan Kr. Singhania says:

    Compliance is good but Government should simplify methods and must realise all business men are not tax evaders.
    One major issue and to me a logical one is that, the onus of paying the GST should be on the end buyer or consumers (the ultimate beneficiary). They must make the payments of their vendors invoice too while making the GST payments.
    What’s happening often is, that the vendor invests money to buy products, sell his goods and services to the ultimate buyer/consumer (the ultimate beneficiary), becomes liable to pay tax as soon as he raised the tax invoice, there by investing further to pay tax, but the ultimate beneficiary does not make the payment ( whether in time or not at all).
    Isn’t it then the vendor is at complete loss by investing his money in procurements then providing services, invests further money for paying Tax and often not get paid by the ultimate beneficiary??
    (Has the Vendor been made an agent to collect and pay Tax to the Government while the ultimate beneficiary enjoys the goods and services but does not care to clear the payments of the vendor – including the GST) -Its Very annoying and frustrating.
    If the Vendor has not received his payments, then why Tax should be paid?. He not only looses money and profits but also lands up investing in tax payment. Total injustice.

    The only recourse is you raise Credit notes ( Another hassle) or file a money suit and invest further time,energy and money fighting your case for recovery for how long ( you don’t know) or perhaps till you die. Leave aside the stress you suffer from.
    The government policy in this regard is absolutely unjustified and open room for evasion. The Government must look into this situations seriously and immediately and make the ultimate beneficiary liable to pay, not only Governments dues of Tax within a time limit, but also clear off the Tax invoice raised by the (Goods or Service) vendor.
    Please suggest ways how can we sound this reasonable and justified situations to the Government for considering this issue and protect the honest Taxpayers.

  4. R VIJAYKUMAR says:

    How is it the same HSN code has two different GST rates? Vermicelli or Saviyan is taxed at 5% while Short Macaroni or Pasta is taxed at 12%? Why should not the rate be 5% as both are wheat derivatives. GST evasion routes will get curtailed!

  5. Umesh Agrawal says:

    The article could not be interpreted well by me. What should be done if number of digits available are only 2? Whether two digits to be mentioned or it should be kept blank? Whether blank would be acceptable or not?

  6. Mohinder Kukreja says:

    The system involved in GST and its reporting should be very friendly to enable the person or firm to file their reporting happily. Its really cumbersome and fear creating one.

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