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Mandatory to mention 4/6-digit HSN/SAC Code w.e.f. April 1, 2021

March 12, 2021 admin Comments 0 Comment

The Central Board of Indirect Taxes (CBIC) issued Notification No. 12/2017-Central Tax dated June 28, 2017, to show specified digits of Harmonised System of Nomenclature (HSN)/ Service Accounting Code (SAC) Code on raising of tax invoices for supply of goods or services as under:

Subsequently, the above notification was amended vide Notification No. 78/2020 – Central Tax, dated October 15, 2020 to mandate 4/6- digit HSN/SAC Code on supply of goods or services on the tax invoices w.e.f. April 1, 2021:

Further, a proviso was inserted to provide that 4- digits of HSN Code is optional in respect of supplies made to unregistered persons i.e., B2C supplies for a registered person having aggregate turnover upto INR 5 crores in the previous financial year.

Thereafter, Notification No. 12/2017-Central Tax dated June 28, 2017 was again amended vide Notification No. 90/2020 – Central Tax, dated December 01, 2020 to provide for class of supply- ‘Chemicals’ whose HSN Code are required to be mentioned at 8-digit on the tax invoices.

Further, it is to be noted that the above changes of mentioning 4/6 Digit HSN/ SAC code, as applicable, are also required to be captured in Table 12 of Form GSTR-1 (i.e., details of outward supplies of goods or services) and therefore, corresponding changes are made in the same.

Furthermore, it is very important to mention the correct HSN/ SAC Code on the tax invoices and Form GSTR-1 as penalty of INR 50,000/- (INR 25,000/- each for CGST and SGST) can be levied for non-mentioning or mentioning wrong HSN/ SAC Code under Section 125 of the Central Goods and Services Tax Act, 2017 (i.e., General penalty).

However, it is to be noted that there are many disputes w.r.t. classification of the various goods and services like sanitizers, railway parts, fryums etc. Further, the disputes are also going on as to whether classification as per Notification No. 1/2017- Central Tax (Rate) dated June 28, 2017 (“Goods Rate Notification”) should be in line with explanation (iii) and (iv) of said notification vide which it is provided that “Tariff item”, “sub-heading” “heading” and “Chapter” in the Goods Rate Notification shall mean tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (“CTA”) and that rules for the interpretation of the First Schedule to the CTA including the Section and Chapter Notes and the General Explanatory Notes would be apply to the interpretation of the Goods Rate Notification which provides only 1,208 goods approx. as against more than 12,000 products under First Schedule of the CTA.

Source: Taxguru.

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Understanding HSN Codes and SAC Under GST

August 12, 2017 admin Comments 0 Comment

What is HSN Code in GST?

HSN stands for Harmonized System of Nomenclature. It is the codification of all the exchanging products into different segments with every section containing warez of comparable nature.

Every product or merchandise exchanged over the world are known by various names indialect contrasts. So also in IT-empowered multinational exchange, a special code is given to each class of tradable ware in view of its inclination and utilization. This arrangement and codification are known as HSN code that you will require to petition for your GST.

What is SAC Code in GST?

If there should arise an occurrence of administrations, for each kind of administration, gaveis given a bound together code for acknowledgement, estimation and tax assessment. These are known as SAC codes. In the present administration impose administration, SAC codes are now characterized by each sort of administration.

HSN / SAC under GST:

Under Goods and Service Tax, the larger part of merchants should receive two-, four-, or eight-digit HSN codes for their products, contingent upon their turn over the earlier year:

Businesses with the turnover of not as much as Rs 1.5 crores won’t be required to utilize HSN codes for their wares.
Businesses with turnover between Rs 1.5 crores and Rs 5 crores should be required to utilize two-digit HSN codes for their wares.
Businesses with turnover equivalent to Rs 5 crores or more should be required to utilize four-digit HSN codes for their wares.
In the instance of imports/sends out, HSN codes of eight digits might be mandatory, as GST must be perfect with worldwide models. You can download the HSN codes and check your HSN code for your business in the GST site.
Small merchants under organization plan won’t be required to say HSN codes in their solicitations.
HSN will be specified in Invoice and said in the GST expense from points of interest, which will be transferred on the GST entrance.
Small organizations under synthesis plan won’t be required to specify HSN codes in their solicitations
At the season of enlistment/movement, the business citizen will be required to specify HSN code of the products he manages amid enrollment
Services will be named per the Services Accounting Code (SAC). There are Service bookkeeping codes issued by the government for Service charge. This is required to continue as before in GST administration also.