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|
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.
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.
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).
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.