DECLARATION OF HSN CODE FOR GOODS AND SERVICES

Compulsory Mentioning of HSN code on all Tax invoices w.e.f 1st April 2021-A major compliance obligation that comes up from 1st April 2021 is mentioning of HSN codes on all the tax invoices.

Salient Features

i. For Taxpayers (with aggregate Annual Turnover more than Rs. 5 Crore during the FY 2020-21)

  • 6 Digits of HSN Code for Goods and Services to be mentioned mandatorily in all Tax Invoices

ii. For Taxpayers (with aggregate Annual Turnover up to Rs. 5 Crore during the FY 2020-21)

  • 4 Digits of HSN Code for Goods and Services to be mentioned mandatorily in B2B Tax Invoices
  • 4 Digits of HSN Code for Goods and Services to be mentioned on optional bases in B2C Tax Invoices

iii. For exports, 8 digits to be mentioned in export invoices and is also a requirement as per Foreign Trade Policy

iv. 49 chemicals as per Notification no. 90/2020 dated 01/12/2020 have to be mandatorily shown under 8 digits code;

v. It is mandatory to report minimum digits as above in Table 12 of GSTR 1 and Tax Invoice also.

vi. There is also a fine of Rs. 50,000/- (Rs. 25,000/- under each of CGST + SGST Acts) for committing a mistake related to this particular scenario under section 125 of the GST Acts.

vii. All the tax invoices therefore should contain HSN digits, description of goods and tax rates specifically for better transparency and avoid any future litigations.

Relevant Notifications

(Notification 12/2017-Central Tax date 28th June 2017; Notification No. 78/2020 dated 15th October 2020; Notification No. 90/2020 dated 15th December 2020)

For more details:

https://taxguru.in/goods-and-service-tax/hsn-code-mandatory-irrespective-turnover-01-04-2021.html

(Republished with Amendments)

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