GST: With effect from April 1, 2021, it has become mandatory to provide a 4 digit HSN code (Goods and Services (GST) invoice).
Goods and Services Tax
If you do business, then this news is important for you. With effect from April 1, 2021, it has become mandatory to give HSN Code of 4 and 6 digits on Goods and Services (GST) invoices. Failure to do so may result in a penalty. Business turnover in a financial year is up to 5 crores, then you have to give 4 digit HSN code. At the same time, it is mandatory to give a 6 digit HSN code for businesses with a turnover of more than Rs 5 crore. Fault of up to 50 thousand rupees may have to be paid if there is a mistake in the HSN code.
According to the Finance Ministry’s tweet, the HSN code in Business-to-Business (B2B) will be mandatory for businessmen with annual turnover of up to 5 crore, while it will be optional in Business-to-Consumer (B2C).
Attention GST Taxpayers!
Requirement of HSN Code for Goods and Services on Tax Invoices is mandatory w.e.f April 01, 2021. pic.twitter.com/ZJUllgnpD2
— CBIC (@cbic_india) April 17, 2021
It is compulsory for all types of businesses for businessmen above 5 crore rupees annually. For these, the HSN code of 6 digits is mandatory. A 6-digit HSN code is mandatory for all tax invoices on the supply of B2B and B2C goods and services.
What is HSN Code?
All products are categorized in HSN (Harmonised System of Nomenclature) code. This helps in the systematic classification of goods at the global level. The HSN Code comes out of the Custom Tariff Act and is determined according to the classification of goods. Tax rates are determined only by the classification of goods.
The rule came into effect from 1 April
From April 1, it has become mandatory for traders to give information about HSN code during the filing of all tax invoices and GSTR-1.
Link for access to HSN code / service accounting code-
For links to 6 digit service classification codes-
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