Introduction: The National Informatics Centre (NIC) has issued a crucial advisory regarding the E-Way Bill System, specifically addressing the use of Harmonized System of Nomenclature (HSN) codes. This advisory, dated 05-01-2023, brings important changes to ensure compliance with the notification No. 78/2020 –Central Tax, dated 15th October, 2020.
Advisory Details: According to the notification, taxpayers with an Annual Aggregate Turnover (AATO) exceeding Rs. 5 Crores are required to provide a minimum 6-digit HSN code for all their Business-to-Business (B2B) and Export transactions. On the other hand, taxpayers with AATO less than Rs. 5 Crores should include at least a 4-digit HSN code.
The implementation of this validation in the E-Way Bill System is scheduled to begin from 1st February 2024. Hence, all taxpayers falling under the purview of this advisory are strongly advised to make the necessary adjustments in their systems.
Detailed Analysis: This advisory aims to streamline the use of HSN codes in E-Way Bills, ensuring a standardized approach based on the taxpayer’s annual turnover. The requirement for a minimum 6-digit HSN code for larger businesses acknowledges the need for more granular detail in transactions, especially those involving B2B and exports. On the other hand, the 4-digit HSN code requirement for smaller businesses strikes a balance between compliance and operational ease.
By providing this advance notice, NIC allows taxpayers ample time to adapt their systems and processes. It emphasizes the importance of incorporating the updated HSN code guidelines while generating E-Way Bills through both web and API systems.
Conclusion: In conclusion, the NIC’s advisory serves as a proactive measure to ensure a smooth transition to the updated HSN code requirements for E-Way Bills. The specified deadline of 1st February 2024 provides taxpayers with sufficient time to make the necessary adjustments, promoting compliance and efficiency in the electronic documentation of goods transportation. Staying abreast of such advisories is essential for businesses to avoid disruptions and adhere to the evolving regulatory landscape.
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National Informatics Centre
E-Way Bill System – Advisory on HSN Code
(Dated: 05-01-2023)
As per the notification No. 78/2020 –Central Tax, dated 15th October, 2020, it is necessary to provide at least 6 digit HSN code for all the B2B and Export transactions by the taxpayers whose Annual Aggregate Turnover (AATO) is more than Rs. 5 Crores. The taxpayers, with AATO less than Rs. 5 Crores, need to provide at least 4 digit HSN code.
This validation will be implemented in e-way bill System from 1st February 2024.
Hence, the taxpayers are advised to make necessary changes in their systems and enter 4 / 6 digit HSN codes while generating the e-way bills through web and API systems from 1st Feb. 2024.
