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Supplier has billed goods in non-relevant HSN Code though rate of GST is same. Consequence for buye

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M.Amin

Partner

87 Points Posted on 10 May 2022

While purchasing goods we find Some of our suppliers have put wrong HSN code in their supply bill- Tax Invoice though rate of GST is same on both the HSN.For Instant Potato Chips has 18 % GST under HSN 1905 which is correct HSN, howeverour supplier has billed it in HSN 1704 at same GST rate of 18% but 1704 is for Chewing Gum and does notremotedly covers Potato Chips. My query is whether we as buer can have any consequences though GST rate is same and there is no revenue lossissue

Replies (4)

Quick Summary

This discussion addresses the issue of suppliers incorrectly using HSN codes on tax invoices, even when the GST rate remains the same. While initially suggested that this might be a clerical error to ignore, further clarification indicates potential consequences for the buyer. These could include penalties or the need to reverse Input Tax Credit (ITC) if the wrong HSN code implies a different intended purchase.

Pankaj Rawat

GST Practitioner

29904 Points Posted on 10 May 2022

As such No.
As during the transit the conveyance not being incepted by officer then there is no problem , ask your supplier to e-mail the Invoice Copy with correct HSN & while filling GSTR 1 to upload invoice with correct HSN.

Book you purchase with correct HSN

M.Amin

Partner

87 Points Posted on 14 May 2022

Thank You Mr.P. Rawat for your assistance. Perhaps I did not phrased my query well.What I meant was there were several instances where our Auditors pointed out that our suppliers have not billed us goods in correct HSN code though GST rate charged was same. For instance ITEM Vinegar our supplier has billed in HSN 1704 12% , our Auditors said correct HSN is 2209 12%. Though rate of GST is same. There is no issue of revenue loss to the authority. But my query was, whether this can have any consequences for us

Pankaj Rawat

GST Practitioner

29904 Points Posted on 14 May 2022

NO NOT AT ALL.

AS ALREADY REPLIED, ITS AN CLERICAL ERROR, CAN IGNORE.

KALLESHAMURTHY K.N

22 Points Posted on 23 June 2026

Sir,

Though the rate of tax is the same, the use of the wrong HSN Code/SAC in the invoice attracts a penalty. Wrong claim of ITC for items not intended your purchase may asked to reverse the ITC availed.