HSN and SAC Code are compulsory In Invoice &Form GSTR-1 with effect from 01 April 2021
We are discussing here on mandatory mentioning of HSN & SAC Code in Invoice and Form GSTR-1 as per amendments to GST Law, with effect from 01 April 2021.
In recent changes about mandatory to mention HSN & SAC Code in Tax Invoice and furnishing inward & outward details at box no 12 of GSTR-1 with effect from 01 April 2021. These are the notifications through which CBIC has clarified who are liable to mentioned HSN & SAC Code on Tax Invoice and Form GSTR-1 with effect from 01 April 2021
S. No. | Notification No. | Year | Date of Issue. |
1. | Notification No. 12/2027- Central Tax | 2017 | 28 June 2017 |
2. | Notification No. 78/2020- Central Tax | 2020 | 15 October 2020 |
3. | Notification No. 82/2020- Central Tax | 2020 | 10 November 2020 |
4. | Notification No. 90/2020- Central Tax | 2020 | 01 December 2020 |
5. | Notification No. 12/2021- Central Tax | 2021 | 01 May 2021 |
On the recommendations of the GST Council the GOI, has given the above notification from time to time through CBIC.
According to the Notification No.82/2020 dated 10 November 2020, In the Instructions of FORM GSTR-1, after serial number 17, the following instruction shall be inserted, namely:- “18. It will be compulsory to specify the number of digits of HSN code for goods or services that a class of registered persons shall be required to mention as may be specified in the notification issued from time to time under provison to rule 46 of the said rules.
According to the Notification No.12/2021 –Central Tax, dated 01 May 2021CBIC has given notification for extension the date to furnish the details as per amendment to GSTR-1 for the month of 4/2021 till 26 May 2021.
Catergory-1 “The tax payers is having Aggregate Turnover is more than INR 5 Cr. in the previous FY and
Category -2” The tax payers is having Aggregate Turnover is below INR 5 Cr in the previous Financial Year.
Category-1: They have to mention HSN Code for supply of Goods to B2B , B2C & unregistered dealers as below Table: (Aggregate Turnover More Than INR 5 Cr in the previous Financial Year)
A). Supply of Goods:
S. No. | Supply of Goods to whom | HSN Code Digits |
1. | Supply made to registered persons B2B | 6 |
2. | Supply of goods to Consumers or Composition dealers | 6 |
3. | Supply of Goods to Un – Registered Dealers | 6 |
B). Supply of Services:
S. No. | Supply of Goods to whom | HSN Code Digits |
1. | Supply made to registered persons B2B | 6 |
2. | Supply of goods to Consumers or Composition dealers | 6 |
3. | Supply of Goods to Un – Registered Dealers | 6 |
C). Supply of Specified Goods According to the Notification No.90/2020 –Central Tax- Date 01 December 2020:
1. | Specified Chemicals as per Notification No.90/2020 | 8 Digits |
D). Supply of Goods & Services to Registered Person (Export):
S. No. | Supply of Goods & Services | HSN Code Digits |
1. | Supply of Goods | 8 |
2. | Supply of Services | 6 |
3. | Supply of Specified Chemical as per Notification No.90/2020 | 8 |
Category-II: They need to mention HSN Code for supply of Goods to B2B ,B2C & unregistered dealers as below Table: (Aggregate Turnover Below INR 5 Cr. in the previous FY).
A). Supply of Goods:
S. No. | Supply of Goods to Whom | HSN Code Digits |
1. | Supply made to registered persons B2B | 4 |
2. | Supply of goods to Consumers or Composition dealers B2C | Optional |
3. | Supply of Goods to Un – Registered Dealers | NIL |
B). Supply of Services:
S. No. | Supply of Services to Whom | HSN Code Digits |
1. | Supply made to registered persons B2B | 4 |
2. | Supply to Consumers or Composition dealers B2C | Optional |
3. | Supply of Services to Un – Registered Dealers | NIL |
C). Supply of Specified Goods according to the Notification No.90/2020 –Central Tax- Date 01 December 2020:
1 | Specified Chemicals as per Notification No.90/2020 | 8 Digits |
D). Supply of Goods & Services to Registered Person (Export):
S. No. | Supply of Goods & Services | HSN & SAC Code Digits |
1. | Supply of Goods | 8 |
2. | Supply of Services | 6 |
3. | Supply of Specified Chemical as per Notification No.90/2020 | 8 |
What is the procedure to Search an Appropriate HSN or SAC Code?
- Step-1. Visit site https:///www.gst.gov.in/;
- Step-2. Click on “Services” icon;
- Step-3. Further Click on “User Services”’
- Step-4. Select “search HSN/ Service classification code’
- Step- 5. On select HSN / Service Classification Code”. Two options HSN & Service Classification Code would be displayed. OR
- From 12 June 2021, GSTN has provided HSN & SAC Codes in Excel sheet in Common Portal.
What is the Penalty Clause?
As per Section 125 if the tax payer is not follow the amendments, they are liable to pay PENALTY of INR 25, 000/- under CGST and INR 25,000/- under SGST and INR 50,000/- under IGST for each mistake under CGST Act, 2017.