Sir How to account this. HSN and Quantity.
A person purchase 2 items with different HSN.
Assembles the same and Sell it with the New HSN.
the product sold will be in negative qty when we take the stock and the purchased will be as unsold.
pls advise.
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Assembling Products. How HSN and qty applicable.
Replies (1)
| For assembled/manufactured products, HSN classification follows the end product, not the components. Here is the complete guidance: 1. HSN for Assembled Product: The HSN code is determined by the finished assembled product — not by the individual components used. This is because the assembled product has its own character and classification. 2. Classification Rules (GRI — General Rules of Interpretation for Customs Tariff): - Rule 1: Classification is primarily by the specific heading that most closely describes the product - Rule 2(a): Incomplete/unfinished goods are classified as the complete/finished article if they have the essential character of the finished article - Rule 3(b): Composite goods/mixtures are classified by the material/component that gives them their essential character 3. Examples: - If you assemble electronic control panels from switches, wires, and enclosures: HSN is for the finished control panel (e.g., HSN 8537), not separately for switches/wires - If you assemble furniture from parts: HSN of the finished furniture (Chapter 94) 4. Quantity Reporting in GSTR-1: - Report the quantity and UOM (Unit of Measurement) of the FINISHED PRODUCT sold - Use the standard UOM as per the HSN code (e.g., NOS for panels/units, KGS for weight-based products) - Do not report component quantities 5. Input HSN vs Output HSN: On the purchase side (input), each component will have its own HSN. On the sales side (output), only the finished product HSN is reported. Both purchase and sale HSN codes coexist in your GST filings — this is normal and expected. 6. Advance Ruling: For non-obvious assembled products, getting an advance ruling from your state GST authority on correct HSN classification is advisable. |
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