Sage-Tips

What is the legal implication of using the incorrect HSN code?

In case of non-mentioning or mentioning wrong HSN code under the Goods and Service Tax Act, the penalty of INR 50,000/- ( INR 25000/- for CGST and SGST each) shall be levied.

Is HSN code mandatory 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.

Is 4 digit HSN code mandatory?

A taxpayer having turnover of upto Rs 5 crore in the preceding financial year is required to furnish 4 digits HSN code on B2B invoices. Earlier, the requirement was 4 digits and 2 digits respectively. HSN codes for goods at 6 digits are universal. Therefore, common HSN codes apply to Customs and GST.

Is HSN mandatory for B2C invoices?

Businesses with aggregate turnover above 5 crore INR in the last financial year must issue the 6-digit HSN codes on both B2B and B2C invoices.

Is there any change in HSN code?

From 1 April 2021, it has become mandatory to report a minimum of 4 digit or 6 digits HSN (Harmonized System of Nomenclature) Code in Tax Invoice and Table-12 of GSTR-1. Earlier taxpayers needed to provide HSN-wise invoice value.

Are HSN codes changing?

What is Amendment of invoice in GST?

Amendment can be made in the later tax period also but the date of revised amended invoice date must be the last date of the original invoice tax period. For example, if an original invoice dated 12/07/2021 is being amended in August then the amended invoice date cannot be later than 31/07/2021.

Can B2B amend invoice?

Step-4 Add Invoice number, The old invoice will appear, which can be amended and the saved. Congratulations your invoice has been amended once you file the return.

Why is it important to mention the correct HSN/ SAC code on invoices?

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 penalty).

Can I claim input tax credit if HSN code is incorrect?

One of the requirement of claiming input tax credit is that invoice should be complete in all respects as mentioned in Section 31 and this section requires to mention HSN for goods and services on the invoice. So if you are furnishing incorrect HSN Code, buyer will not be able to claim input tax credit.

What is the HSN/HS code?

The reason behind using HSN/HS code is that one product has different name all around the world. To avoid miss communication the HSN/HS code is introduced by WCO (world custom organisation). Can I export goods in different HSN codes if I buy them in another HSN code?

What is the penalty for wrong HSN code on gstr 1?

PENALTY 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 penalty).