HSN & SAC Code Are Mandatory In Invoice And Form GSTR-1 W.E.F.01.04.2021

Brief Notes on mandatory mentioning of HSN & SAC Code in Invoice and Form GSTr-1 as per amendments to GST Law, 2017 w.e.f.01.04.2021.

Dear Professional Colleagues, Good Day to you. I have gone through recent changes about mandatory to mention HSN & SAC Code in Tax Invoice and furnishing inward & outward details at box no 12 of GSTR-1 w.e.f.01.04.2021. Some of the professionals are having confusion about mentioning of HSN & SAC code in Tax Invoice and Furnishing inward & outward details in GSTR-1. How many Digit of HSN & SAC Codes are to mention in the Tax invoice & GSTR-1 of GST Law, 2017. Is there any threshold limit to mention HSN &SAC Codes for 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. [email protected] or what’s app No.9848099490.

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..1.4.2021,

S.NO. Notification No. Year Date of Issue.
1 Notification No. 12/2027- Central Tax 2017 28.06.2017
2 Notification No. 78/2020- Central Tax 2020 15.10.2020
3 Notification No. 82/2020- Central Tax 2020 10.11.2020
4 Notification No. 90/2020- Central Tax 2020 01.12.2020
5 Notification No. 12/2021- Central Tax 2021 01.05.2021

On the recommendations of the GST Council the Government of India , has given the above notification 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 Notification No.12/2021 –Central Tax , dt.1.5.2021 CBIC has given notification for extension the date to furnish the details as per amendment to GSTR-1 for the month of 4/2021 till 26.05.2021.

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.5 Cr in the previous Financial Year)

A). Supply of Goods:

S.NO. Supply of Goods to whom Digits of HSN Code
1 Supply made to registered persons B2B 6
2 Supply of goods to Consumers  or Composition dealers 6
3 Supply of Goods to Un – Registered Dealers 6

B). Supply of Services:

S.NO. Supply of  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 Specified Goods as per Notification No.90/2020 –Central Tax- Date.01.12.2020:

1 Specified Chemicals as per N.No.90/2020 8 Digits

D). 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 of 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.5 Cr in the previous Financial Year).

A). Supply of Goods:

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

B). Supply of Services:

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

C). Supply of Specified Goods as per Notification No.90/2020 –Central Tax- Date.01.12.2020:

1 Specified Chemicals as per N.No.90/2020 8 Digits

D). 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 of 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’

> Step- 5. On select HSN / Service Classification Code”. Two options HSN and Service Classification Code would be displayed. OR

> GSTN has provided HSN & SAC Codes in Excel sheet in Common Portal from 12.6.2021.

PENALTY CLAUSE:

As per Section 125 if the tax payer is not follow the amendments , they are liable to pay PENALTY of Rs.25,000/0 under CGST and Rs.25,000/- under SGST and Rs.50,000/- under IGST for each mistake under CGST Act,2017.

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7 Comments

  1. K.Subbiyah says:

    Sir Please clarify the Summary of HSN Code in table 12 must be equal to B2B,B2CS,CDNR etc.. or it can vary. The debit notes and credit notes raised to adjust the differences in Original Invoice reported in CDNR to be reported in HSN Summary or not required to be reported.

    1. B.S.SEETHAPATHI RAO says:

      Dear Sir, Thank you to refer my article. If you are not mentioned HSN code in tax invoice or GSTR-1,As per Section 125 if the tax payer is not follow the amendments , they are liable to pay PENALTY of Rs.25,000/0 under CGST and Rs.25,000/- under SGST and Rs.50,000/- under IGST for each mistake under CGST Act,2017.

    1. B.S.SEETHAPATHI RAO says:

      Sir HSN CODE is applicable to Exempted Goods and services, not required to Non-Gst goods like petrol, Diesel,Natural Gas and Liquor etc.,

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