Table of Contents
What is the purpose of HSN code?
The purpose of HSN codes is to make GST systematic and globally accepted. HSN codes will remove the need to upload the detailed description of the goods. This will save time and make filing easier since GST returns are automated.
Is HSN code necessary?
The mandatory reporting of HSN codes was introduced while preparing the GSTR-1 return from 1st April 2021. As per the revised declaration, taxpayers with an annual aggregate turnover of more than Rs. 5 crore must mandatorily declare six digits of the HSN code on all the tax invoices.
What happens if you put the wrong HSN code in GST?
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 …
What is difference between HSN & SAC code?
The basic difference between the HSN and SAC code is that HSN is used to identify the Goods and SAC codes are used to identify the services. Another contrast between the two is the number of digits present in the code, for instance, HSN number has 8 Digit codes while SAC number has 6 digit codes.
Is it mandatory to put HSN code in invoice?
It will be mandatory 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 proviso to rule 46 of the said rules. As per Notification No.
Why is HSN code required for GST?
A: HSN codes are internationally recognized system of codifying and classifying all the products in the World. It will make GST compliant with the international standards and ensure proper levy of taxes. HSN gives a systematic and logical way of classification, thereby reducing the chances of any misinterpretations.
What if we paid IGST instead of CGST and SGST?
Ideally, for an intra-state supply, the tax collected should be CGST/SGST instead of IGST. To rectify the situation, the person concerned will have to pay CGST/SGST and get a refund of the amount paid as IGST. Note: No interest will need to be paid when the taxpayer pays the correct tax later on.