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Quoting of HSN on Tax Invoices With effect from April 1, 2021

A. Quoting of HSN Classification on Invoices (With effect from April 1, 2021) –

Notif. No Date Summary of Notification 78/2020 – Central Tax and 6/2020 – Integrated Tax 15-10-2020 HSN classification on Invoices (with effect from 01/04/2021)

a. HSN at 6 digits for B2B supplies for taxpayers with aggregate annual turnover above Rs. 5 crores

b. HSN at 4 digits for B2B supplies for taxpayers with aggregate annual turnover up to Rs. 5 crores

If the supplies by registered person having aggregate turnover up to five crores rupees in the previous FY, HSN reporting on tax invoice for supplies made to unregistered persons (B2C) may not be required.

B. Table for HSN/SAC reporting based on Turnover and Nature of Supplies –

S.No Aggregate Annual Turnover Supplies made to Nature of Supply HSN SAC
1 Above Rs 5 Crores B2B Domestic (Inter/Intra) 6 Digits 6 Digits
2 Upto Rs 5 Crores B2B Domestic (Inter/Intra) 4 Digits 6 Digits
3 Upto Rs 5 Crores in Previous FY B2C Domestic (Inter/Intra) Not Required 6 Digits
4 Turnover of any value Exports Exports 8 Digits 6 Digits

C. Steps for implementation of above notification –

1. Ascertain your aggregate annual turnover for FY 2020-21

2. Check nature of supplies (B2B/B2C/Exports)

3. Review invoice format in Accounting package (SAP/Oracle/Tally or customized package)

4. Test the print and email format of the invoice

5. For any discrepancy reach out to Service provider for invoice formatting

6. Develop Outward Supply Reports (Sales and Inter-State Stock Transfer) incorporating HSN digits.

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Disclaimer: The content of this document is for general information purpose only. TaxMarvel shall not accept any liability for any decision taken based on the advice. You should carefully study the situation before taking any decision.

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Rohit is an Enterpreneur and has founded a boutique consulting firm - TaxMarvel Consulting Services LLP. View Full Profile

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