Wrong HSN code on invoice

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yash (Querist)
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18 July 2020 i m manufacturer
is there any penalty in case of wrong HSN code mentioned on invoice. & i want to export some goods we are sure about first 4 digits of HSN code, but for remaining code we are not sure.
is there any breach of law for mentioning wrong HSN code & if Yes the what is the penalty for the same.

Lekhraj sood

Lekhraj sood (Expert)
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18 July 2020 Unless it has some custom duty or GST rate implication, it should not be a big issue.

yash

yash (Querist)
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18 July 2020 it has gst applicability and also want to export that item

Lekhraj sood

Lekhraj sood (Expert)
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19 July 2020 You would be exporting under LUT,right?. So GST applicability will not be an an issue.If you want to export with payment of tax then only there will be a question.Can you share the product description and 4 digits HSN?

yash

yash (Querist)
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20 July 2020 yes. I am sharing product description and 8 digit HSN ocde

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2025 Yes, using a **wrong HSN code** on an invoice can potentially attract **penalties** under the **GST law**, especially in the context of **exports** and **differential GST rates**.

Let me address your situation in parts:

---

### ✅ 1. **Is there a penalty for wrong HSN code?**

Yes, under **Section 125 of the CGST Act**, a general penalty of up to **₹25,000** (CGST ₹12,500 + SGST ₹12,500) can be levied **if wrong HSN results in non-compliance**, especially in:

* **Wrong tax rate charged**
* **Incorrect credit passed to the buyer**
* **Mismatch in export classification (if claiming refunds)**

However, if the HSN mistake **doesn’t result in loss of revenue** or **rate difference**, authorities may **not impose** a penalty.

---

### ✅ 2. **What if you’re exporting goods under LUT?**

* If you're exporting **under LUT (without payment of tax)**, the **HSN error is less likely to affect refunds**, unless **customs requires precise classification**.
* However, if you export **with payment of tax**, **correct HSN** is essential to:

* Claim **IGST refund** correctly
* Avoid **query or rejection** from customs

---

### ✅ 3. **What if only first 4 digits are known?**

The **first 4 digits** refer to the **chapter heading** and are often sufficient for **broad classification**. But:

* For **exports**, customs may require the **6- or 8-digit HSN**.
* If you're unsure, consult the **GST Tariff Schedule** or **Customs classification experts** to avoid misclassification.

---

### ✅ 4. **Practical advice:**

* Mention the **correct 4-digit HSN** if unsure, and **do not fabricate** the last digits.
* **Avoid guessing** the full 8-digit code.
* Use CBIC's HSN finder: [https://cbic-gst.gov.in/gst-goods-services-rates.html](https://cbic-gst.gov.in/gst-goods-services-rates.html)

---

### 📌 Recommendation:

Please share your **product description** and the **4-digit HSN** you’re confident about. I can help you identify the correct **6- or 8-digit code**.

This will help you:

* Avoid classification disputes
* Ensure correct tax rates
* Prevent issues in GST refund or customs processing

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