pri Guidance Notes On Mentioning Of HSN & SAC Codes Guidance Notes On Mentioning Of HSN & SAC Codes

Guidance Notes On Mentioning Of HSN & SAC Codes And Furnishing The Details Of Nil Rated, Exempted, And Non GST Supplies In FORM GSTR-1w.E.F.1.4.2021-Reg

Guidance Notes on supply of Exempted Goods and Services- Whether Mandatory to mention HSN Code &SAC Code on Invoice – How and Where to mention such supply of Exempted Goods and Services in Form GSTR-1 w.e.f.01.04.2021.

Dear Professional Colleagues, Good Day to you. I have received requests from our professional colleagues to clarify about mandatory to mention HSN & SAC Code in Tax Invoice, Bills of Supply  and furnishing inward & outward details in Form  GSTR-1 w.e.f.01.04.2021. Some of the professionals are having confusion about mentioning  of HSN & SAC code for SUPPLY OF EXEMPTED GOODS AND SERVICES in Tax Invoice or Bill  Of Supply and How and Where to furnishing such outward details in GSTR-1. How many Digit of HSN & SAC Codes are mention  in the Tax invoice & GSTR-1 of GST Law,2017. Is there any threshold limit to mention HSN &SAC Codes for supply of Exempted supply of Goods and Services from 01.04.2021. So, here with I am trying to clarify at my best of Knowledge. Please refer and provide your suggestions to my mail i.d. sitapathirao@yahoo.co.in or what’s app No.9848099490.

Guidance Notes-I:- Requirement of mentioning of HSN & SAC Codes on supply Taxable, Exempted, Non Taxable, Zero rated supply of Goods and Services on Tax Invoice, Invoice  or Bill of Supply under GST Act,2017 mandatory w.e.f-01.04.2021.

As per the below mentioned notifications CBIC has clarified who are liable to mentioned HSN & SAC Code on Tax Invoice and Form GSTR-1 w.e.f..

S. NO. Notification No. YEAR DATE OF ISSUE SECTION RULE
1 12 2017 28.06.2017 31(1) 46(1)(g) Provisio (i), Provisio-1 & 46(A).
2 78 2020 15.10.2020 31(1) 46(1)(g) Provision (i), 46(A), 49
3 82 2020 10.11.2020 37(1),39(1) 46(1)(g), 59(1),(2),(a),  (b), (c), (3), (4)
4 90 2020 01.12.2020 37(1),168 46 (provision-1)
5 12 2021 01.05.2021 37)1) after Provisio   (2), and 39(1) Rule 59(1),(3), (4)(a)(i), (ii),(b)(i),(ii),(c)and (5)(a),(b),

On the recommendations of the GST Council the Government of India , has given the above notifications from time to time through CBIC. The CBIC has mentioned in such notifications that they have bifurcated into 2 types taxpayers based on  Aggregate Turnover  of Previous Financial Year.

As per Notification No.82/2020 dated.10-11-2020, In FORM GSTR-1, in the Instructions, after serial number 17, the following instruction shall be inserted, namely:- “18. It will be mandatory to specify the number of digits of HSN code for goods or services that a class of registered persons shall be required to mention as may be specified in the notification issued from time to time under proviso to rule 46 of the said rules.

As per Sec.31 read with Rule 46 (g) of the CGST ACT ,Every registered person shall be issued a Tax Invoice containing the following particulars , namely:-

(g) Harmonised System of Nomenclature code for goods or services,

Provided that the Board may, on the recommendation of the GST Council, by notification, specify-

(i). the number of digits of Harmonised of Nomenclature code for goods or services that a class of registered persons shall be required to mention, for such period as may be specified in the said notification; and

(ii). The class of registered persons that would not be required to mention the Harmonised System of Nomenclature code for goods or services, for such periods may be specified in the said notification.

Provided further that where an invoice is required to be issued under clause (f) of sub-section (3) of Section.31 of a registered person may issue a consolidated invoice at the end of a month for supplies covered under sub-section (4) of Sec.9, the aggregate value of such supplies exceeds Rs.5,000/- in a day from any or all the supplies.

As per Sec.31 read with Rule 46A w.e.f.13.10.2017 “Notwithstanding anything contained in rule 46 or rule 49 or Rule 54, where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single” invoice-cum-bill of supply” may be issued for all such supplies

Catergory-1 “ The tax payers is having Aggregate Turnover is more than Rs.5 Cr in the previous Financial Year and

Category -2” The tax payers is having Aggregate Turnover is below Rs.5 Cr in the previous Financial Year.

Category-1: They have to mention HSN Code  for supply of Goods to B2B ,B2C and unregistered dealers as below Table: (Aggregate Turnover More Than Rs.50 Cr in the previous Financial Year)’

A). Supply of  Exempted Goods & Non-GST Goods:

S.NO. Supply of Exempted Goods and Non GST Goods to whom Digits of HSN Code
1 Supply of Exempted goods to registered persons B2B 6
2 Supply of Exempted  goods  to Consumers  or Composition dealers 6
3 Supply of Exempted  Goods  to Un – Registered Dealers 6
4 Supply of NON- GST GOODS (Petroleum Products)Under GST Act. Not Applicable

B). Supply of Exempted Services:

S.NO. Supply of  Exempted Service to whom Digits of SAC Code
1 Supply made to registered persons B2B 6
2 Supply  to Consumers  or Composition dealers B2C 6
3 Supply of Services  to Un – Registered Dealers 6

C). Supply of Exempted Goods and Services to Registered Person (Export):

S.No. Supply of Exempted  Goods and Services HSN &SAC Codes
1 Supply of Exempted Goods 8
2 Supply of Exempted Services 6
3 Supply od Specified Chemical as per N.No.90/2020 8

Category-II: They have to mention HSN Code  for supply of Goods to B2B ,B2C and unregistered dealers as below Table: (Aggregate Turnover Below Rs.50 Cr in the previous Financial Year).

A). Supply of Exempted Goods:

S.NO. Supply of Exempted Goods to whom Digits of HSN Code
1 Supply of Exempted goods  made to registered persons B2B 4
2 Supply of Exempted goods to Consumers  or Composition dealers B2C Optional
3 Supply of Exempted  Goods to Un – Registered Dealers NIL
4 Supply of NON- GST GOODS (Petroleum Products)Under GST Act. Not Applicable

B). Supply of Exempted Services:

S.NO. Supply of  Exempted Service to whom Digits of SAC Code
1 Supply of Exempted Services  made to registered persons B2B 4
2 Supply of Exempted Services   to Consumers  or Composition dealers B2C Optional
3 Supply of Exempted Services  to Un – Registered Dealers NIL

C). Supply of Goods and Services to Registered Person (Export):

S.No. Supply of Goods and Services HSN &SAC Codes
1 Supply of Goods 8
2 Supply of Services 6
3 Supply od Specified Chemical as per N.No.90/2020 8

How To Search an Appropriate HSN or SAC Code :

> Step-1. Visit site https:///www.gst.gov.in/;

> Step-2. Click on “Services” icon;

> Step-3 . Further Click on “ User Services”’

> Step-4. Select “ search HSN/ Service classification code’

5. On select HSN / Service Classification Code”. Two option HSN and Service Classification Code would be displayed.

Guidance Notes-II:- Requirement of furnishing the details of NIL Rated, Exempted and  Non-GST  Outward supply of Goods and Services as per GST Act,2017 mandatory  to furnishing in Form GSTR-1 on monthly or quarterly,w.e.f-01.04.2021.

As per Sec.37(1) of the CGST Act,2017” Every registered person, shall furnish, electronically, the details of outward supplies of goods and services or both during a tax period or or before the 10th day of the succeeding the said tax period and such details shall be communicated to the recipient of the suppliers,

As per Explanation to Sec.37 of CGST Act,2017, “Details of outward supplies” shall include details of  invoices, debit notes, credit notes and revised invoices issued in relation to outward supplies during any tax period.

Form GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details all outward supplies, The return is divided in to 13 Tables.

Table-1:- 1,2 and 3 furnishing the details of GSTIN and aggregate turnover in the preceding year.

Table-4:- Taxable Outward supplies of goods and services made to registered persons (including UIN-Holders) other than Zero rated supplies and Deemed Exports etc.,.

Table-5:- Taxable outward inter-State Supplies to un-registered persons where the invoice value is more than the Rs. 2.5 lakhs,

Table-6:- Details of Zero rate supplies and Deemed Exports,

Table.7:- Details of taxable supplies (Net of debit notes, Credit Notes) to unregistered persons other than the supplies covered in Table-5,

Table- 8:- Details of NIL Rated, Exempted Supplies of goods and Exempted supplied of Services and Non GST goods outward supplies (Petroleum ) ,

Table-9:- Details of debit notes, Credit Notes, refund vouchers issued during current period and details of any amendments of taxable outward supply furnished in the GSTR-1 returns for earlier tax periods in Table.4.5 and 6,

Table-10:- Details of debit note and credit note issued to unregistered person,

Table-11:- Details of Advances received /Advance adjusted in the current tax period or amendments of information furnished in earlier tax period,

Table-12:- HSN-Wise summary of outward supplies,

Table-13:- Documents issued during the tax period.

So, you have to furnishing the details of NIL Rated, Exempted and Non-GST supplies of Goods and Services made during a particular tax period, includes the intra-State and Inter-State supplies of goods and services.

Here with I am providing definition of NIL rated, Exempted , Zero Rated and Non-GST supply of goods and services for your ready reference.

A). NIL RATED: This type of supply attracts a GST of 0%. Input tax credit cannot be claimed on such supplies, like, food grains, salt and jiggery etc.,

B). Exempted: This supply includes items which are used for everyday purposes. Since they are basic essentials, they do not attract any GST at all. You will not be abe to claim any ITC on such supplies like bread, fresh fruits, milk, curd etc.,

C). Zero Rated: This supplies made oversea and to Special Economic Zone (SEZ) or SEZ Developers cone under the ZERO –Rated Supplies. This supplies attract a GSTof 0%. For such supplies , ITC can be claimed,

D). Non-GST: This supplies which don’t come under the scope of GST are termed as NON-GST supplies. However, these supplies can attract taxes other tha the GST as per the jurisdiction of the State or the Country, like petrol, Diesel, Natural Gas and Alcohol etc.

Here with I am provide draft table -8, relating to details of NIL rated, Exempted and Non-GST outwards supply of goods and exempted supply of Services. For your clarity .

Here with I am providing how to fill Table NO.8 of Form GSTR-1,with details of NIL rated, Exempted and Non-GST outwards supply of goods and exempted supply of Services, step by step for clarity.

Step-1 Select on the 8A,8B,8C, 8D to furnishing the details as below;

8A: Details of Inter-State supplies of registered persons,

8B:-Details of Intra-State supplies to registered persons,

8C:- Details of Inter-State supplies to unregistered persons,

8D:- Intra-State supplies to unregistered persons.

Step-2 Select on edit to make the fields editable :-

Step.3:Enter these following details in this page:

NIL rated supplies, Exempted (Other than NIL rated/non –GST supply), and  Non-GSTsupplies amount for the following category:-

1). Inter-State supplies to a registered dealer,

2). Inter-State supply to an unregistered dealer,

3). Intra-State supply to a registered dealer,

4). Intra-State supply to an unregistered dealer.

Step:4 :- Click on save button  and a success message will be displayed on top screen.

Step:-5. Select on back button to go back GSTR-1 page. You can see the summary of all NIL rated supplies made.

Conclusion: After careful study of the above Sections of CGST Act,2017 and Rules of CGST rules 2017 and Notification issued by CBIC from time to time with regards to mention of HSN & SAC Codes on Tax Invoice, Invoice or Bill of Supply of Goods and Services of (a).Nil Rated,

(b). Exempted , (c). Zero Rated is Mandatory w.e.f.01.04.2021 and mandatory to furnished the details of Outward supply of Goods and Services of (a). Nil Rated, (b). Exempted , (c). Non GST at Table No.8 of Form GSTR-1 from 01.04.2021.

Penalty: As per Sec.125 If the tax payers is not follow the amendments, rules w.e.f.1.4.20121, they are  liable to pay  a penalty Rs.25,000/ under CGST ,Rs.25,000/- under SGSCT and Rs.50,000/- under IGST for each mistake under CGST Act,2017.

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