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

More Under Goods and Services Tax

4 Comments

  1. 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.

  2. 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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