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Taxpayers Have Mandatorily Declare HSN/SAC Codes In GST Tax Invoices From 1st April, 2021

E-Invoicing has been made applicable from 1st October 2020 to all businesses whose aggregate turnover has exceeded Rs.500 crores limit in any of the preceding financial years from 2017-18 to 2019-20.

Further, from 1st January 2021, E-Invoicing will be applicable to businesses exceeding the Rs.100 crore turnover limit in any of the financial years between 2017-18 to 2019-20, as intimated in Notification No. 88/2020 –Central Tax.

On 8th March 2021, The Central Board of Indirect Taxes and Customs (CBIC) notified that e- Invoicing will be applicable from 1st April 2021 for businesses with a turnover of more than Rs.50 crores (in any financial year from FY 2017-18 onwards, as intimated in Notification No. 5/2021 –Central Tax.

Sl No Aggregate Turnover in the preceding Financial Year Number of Digits of HSN/SAc Code
1. Upto INR 5 crores 4
2. More than INR 5 crores 6
3. Supply of Chemicals 8

 

CBIC
OPTIONAL

A proviso was inserted to provide that 4- digits of HSN Code is optional in respect of supplies made to unregistered persons i.e., B2C supplies for a registered person having aggregate turnover upto INR 5 crores in the previous financial year.

CHEMICAL SUPPLY

Notification No. 12/2017-Central Tax dated June 28, 2017 was again amended vide Notification No. 90/2020 – Central Tax, dated December 01, 2020 to provide for class of supply- ‘Chemicals’ whose HSN Code are required to be mentioned at 8-digit on the tax invoices.

PENALTY

It is very important to mention the correct HSN/ SAC Code on the tax invoices and Form GSTR-1 otherwise penalty of INR 50,000/- (INR 25,000/- each for CGST and SGST) can be levied for non-mentioning or mentioning wrong HSN/ SAC Code under Section 125 of the Central Goods and Services Tax Act, 2017 (i.e., General penalty).

General penalty

The above changes of mentioning 4/6 Digit HSN/ SAC code, as applicable, are also required to be shown in Table 12 of Form GSTR-1 (i.e., details of outward supplies of goods or services) and therefore, corresponding changes are made in the same.
Digit HSN

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9 Comments

  1. Ghanshyam kumar says:

    Client business is IT Software service and turnover is less than 1 Cr. So is mandatory to mention 4digit SAC code in GSTR1 & Tax invoice (IF YES) ..Please tell me 4 digit sac code.

  2. krishna says:

    Hi, whether we can use 1 sac code of our Main service to Multiple services under that same SAC Code. or should we need to take new codes for different services.pl. guide

  3. Ca Murari kumar Dalmia says:

    As no Option to provide SAC is coming in table 12 of of GSTR one so how service service providers like CA will fill SAC in GSTR 1 while filing GSTR 1 for the month of April21

  4. Puneet Arora says:

    Hi please tell me the HSN code of dried Makhana as in list its HSN code is 08.
    How to make it 4 Digit or 6 digit HSN code to comply with latest compliance.

  5. snehil agrawal says:

    As HSN code prescribed by CBIC for most of the goods under GST is Four Digit code, how can a supplier mention 6 digit HSN code for invoicing such goods?

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