HSN Code mandatory from 1st April for GST taxpayer with turnover of more than Rs 5 Crore - (31 Mar 2021)
Goods and Services Tax
CBIC (Central Board of Indirect Taxes and Customs) with effect from 1st April has made mandatory for a GST taxpayer, with a turnover of more than Rs 5 crore in the preceding financial year, to furnish 6 digits HSN Code (Harmonised System of Nomenclature Code), or SAC (Service Accounting Code) on the invoices issued for supplies of taxable goods and services. A taxpayer having turnover of upto Rs 5 crore in the preceding financial year is required to mandatorily furnish 4 digits HSN code on B2B invoices. Earlier, the requirement was 4 digits and 2 digits respectively. Now, GST taxpayers will have to furnish HSN/SAC in their invoices, as per the revised requirement.
HSN codes for goods at 6 digits are universally common. Therefore, common HSN codes apply to Customs and GST. Accordingly, codes prescribed in the Customs tariff are used for the GST purposes too. In Customs Tariff, HS code is prescribed as heading (4 digits HS), sub-heading (6 digits HS) and tariff items (8 digits). Further, HSN search facility is also available on the GST portal. HSN code plays a significant role in curbing tax evasion.
HSN stands for Harmonised System of Nomenclature. It is a six-digit code that classifies various products. The HSN codes apply to both GST and Customs. HSN Code was introduced by the World Customs Organization (WCO) in the year 1988. Manufacturers and importers/exporters have been commonly using HSN Codes. A large number of GST taxpayers are already furnishing HS codes/SAC at 6/8 digits on voluntary basis on the invoices, e -way bills and GSTR 1 returns.
Tags : HSN CODE MANDATORY GST TAXPAYER