Mandatory HSN /SAC Code Requirement In GST

𝐇𝐒𝐍 / 𝐒𝐀𝐂 𝐂𝐎𝐃𝐄 𝐌𝐀𝐍𝐃𝐀𝐓𝐎𝐑𝐘 𝐅𝐑𝐎𝐌 𝟎𝟏𝐬𝐭 𝐀𝐏𝐑𝐈𝐋 𝟐𝟎𝟐𝟏

The Taxpayers whose aggregate Turnover is up to Rs. 5 crores in the preceding Financial Year HSN / SAC code of 4 digits is mandatory for all the B2B tax invoices and optional for B2C tax invoices on the supplies of Goods and Services.

The Taxpayers whose aggregate Turnover is more than Rs. 5 crores in the preceding Financial Year HSN / SAC code of 6 digits is mandatory for both B2B and B2C tax invoices on the supplies of Goods and Services.

𝐂𝐨𝐧𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐞𝐬 𝐨𝐟 𝐍𝐨𝐧 𝐦𝐞𝐧𝐭𝐢𝐨𝐧𝐢𝐧𝐠 𝐨𝐟 𝐇𝐒𝐍 / 𝐒𝐀𝐂 𝐜𝐨𝐝𝐞 𝐨𝐫 𝐦𝐞𝐧𝐭𝐢𝐨𝐧𝐢𝐧𝐠 𝐢𝐧𝐜𝐨𝐫𝐫𝐞𝐜𝐭 𝐇𝐒𝐍 /𝐒𝐀𝐂 𝐜𝐨𝐝𝐞.

1. 𝐈𝐧𝐯𝐨𝐢𝐜𝐞 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐭𝐫𝐞𝐚𝐭𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐚𝐥𝐢𝐝 𝐈𝐧𝐯𝐨𝐢𝐜𝐞: Invoice will be treated as Invalid Invoice in case of Non mentioning or incorrect mentioning of Requisite particulars on Invoice.

2. 𝐁𝐮𝐲𝐞𝐫 𝐰𝐢𝐥𝐥 𝐧𝐨𝐭 𝐛𝐞 𝐚𝐛𝐥𝐞 𝐭𝐨 𝐜𝐥𝐚𝐢𝐦 𝐢𝐧𝐩𝐮𝐭 𝐭𝐚𝐱 𝐜𝐫𝐞𝐝𝐢𝐭: One of the requirement of claiming input tax credit is that invoice should be complete in all respects as mentioned in Section 31 and this section requires to mention HSN for goods and services on the invoice. So if you are furnishing incorrect HSN Code, buyer will not be able to claim input tax credit.

3. 𝐏𝐞𝐧𝐚𝐥𝐭𝐲 𝐟𝐨𝐫 𝐢𝐧𝐜𝐨𝐫𝐫𝐞𝐜𝐭 𝐢𝐧𝐯𝐨𝐢𝐜𝐢𝐧𝐠: Penalty of Rs. 25,000 under section 125 of CGST Act.