6-digit HSN code mandatory in invoices for biz with over Rs 5crore turnover

By: |
March 31, 2021 7:37 PM

Businesses with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services from April 1

GST newsFile Image: Reuters

Businesses with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services from April 1, the Finance Ministry said on Wednesday. Those with turnover of up to Rs 5 crore in the preceding financial year would be required to mandatorily furnish four-digit HSN code on B2B invoices. Earlier, the requirement was four-digits and two-digits respectively. “With effect from the 1st April, 2021, GST taxpayers will have to furnish HSN (Harmonised System of Nomenclature Code), or Service Accounting Code (SAC) in their invoices, as per the revised requirement, the Ministry said in a statement.

In trade parlance, every product is categorised under an HSN code (Harmonised System of Nomenclature). It helps in systematic classification of goods across the globe. 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. The Ministry said manufacturers and importers/exporters have been commonly using HSN Codes. Manufacturers were furnishing these codes even in the pre-GST regime. Importers and exporters have been furnishing these codes in import/export documents. Traders would mostly be using HSN codes furnished in the invoices issued to them by the manufacturer or importer suppliers.

“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,” it added.

AMRG & Associates Senior Partner Rajat Mohan said traders, manufacturers and services providers would be required to give more precise HSN code while issuing an invoice to the supplies with effect from April 1. “This will help tax officers with deeper data analytics for every item supplied and help them in arresting tax evasion emanating from fake invoices and irregular tax credit claims,” Mohan added.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1US employers added a sluggish 210,000 jobs in November
2Forex reserves down by USD 2.713 mn to USD 637.687 bn
3Rs 374.78 cr payment pending for reprocessing under PM-KISAN since 2019: Centre