Six digit HSN code in GST made mandatory from April 1


NEW DELHI: It has been made mandatory for a GST taxpayer having a turnover of more than Rs 5 crore in the preceding financial year, to furnish 6 digits HSN Code (Harmonised System of Nomenclature Code). This comes into effect from April 1.

This is applicable for SAC (Service Accounting Code) on the invoices issued for supplies of taxable goods and services. 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. Accordingly, codes prescribed in the Customs tariff are used for GST purposes too. In Customs Tariff, HS code is prescribed as heading (4 digits HS), sub-heading (6 digits HS) and tariff items (8 digits). These documents are accessible on the CBIC web-site. GST rate schedule for goods and services can also be accessed from the website.

HSN search facility is also available on the GST portal.

Manufacturers and importers / exporters have been using HSN Codes. Manufacturers were furnishing these codes even in the pre-GST regime. Importers and exporters have been furnishing these codes in their documents earlier also. Traders used HSN codes furnished in the invoices issued to them by the manufacturer or importer suppliers. A large number of GST taxpayers are already furnishing these codes on voluntary basis on the invoices, e -way bills and GSTR 1 returns.

(The one-stop destination for MSME, ET RISE provides news, views and analysis around GST, Exports, Funding, Policy and small business management.)

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