GST Update - Quoting of HSN on Tax Invoices

Rohit Kumar Singh | Last updated: 16 March 2021

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This update clarifies the requirements for quoting Harmonised System of Nomenclature (HSN) codes on GST tax invoices, effective from April 1, 2021. The number of digits required depends on your aggregate annual turnover and the nature of the supply. For Business-to-Business (B2B) supplies, those with turnover above Rs. 5 crores need 6 digits, while those up to Rs. 5 crores need 4 digits. For Business-to-Consumer (B2C) supplies, HSN reporting might not be necessary if your turnover is up to Rs. 5 crores. Exports require 8 digits for HSN.

1. Quoting of HSN Classification on Invoices (With effect from April 1, 2021)

Notif. No

Date

Summary of Notification

78/2020 - Central Tax

and

6/2020 - Integrated Tax

15-10-2020

HSN classification on Invoices (with effect from 01/04/2021)

HSN at 6 digits for B2B supplies for taxpayers with aggregate annual turnover above Rs. 5 crores
HSN at 4 digits for B2B supplies for taxpayers with aggregate annual turnover up to Rs. 5 crores

If the supplies by registered person having aggregate turnover up to five crores rupees in the previous FY, HSN reporting on tax invoice for supplies made to unregistered persons (B2C) may not be required.

GST HSN Invoice Requirements: Updated Rules Explained

2. Table for HSN/SAC reporting based on Turnover and Nature of Supplies

S.No	Aggregate Annual Turnover	Supplies made to	Nature of Supply	HSN	SAC
1	Above Rs 5 Crores	B2B	Domestic (Inter/Intra)	6 Digits	6 Digits
2	Upto Rs 5 Crores	B2B	Domestic (Inter/Intra)	4 Digits	6 Digits
3	Upto Rs 5 Crores in Previous FY	B2C	Domestic (Inter/Intra)	Not Required	6 Digits
4	Turnover of any value	Exports	Exports	8 Digits	6 Digits

3. Steps for implementation of above notification

Ascertain your aggregate annual turnover for FY 2020-21
Check nature of supplies (B2B/B2C/Exports)
Review invoice format in Accounting package (SAP/Oracle/Tally or customized package)
Test the print and email format of the invoice
For any discrepancy reach out to Service provider for invoice formatting
Develop Outward Supply Reports (Sales and Inter-State Stock Transfer) incorporating HSN digits

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About the Author

Rohit Kumar Singh

Founder - TaxMarvel Consulting Services LLP

Rohit is a CA, CS and CMA and Gold Medalist Law Graduate. He has also passed DISA (ICAI). Rohit is Founder of TaxMarvel Consulting Services LLP (a niche consulting firm engaged in providing GST Services to Corporates and SMEs) He was earlier head ofGST Business (GST Suvidha Provider) for Karvy Data Management Servic ... Read more

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