HSN Code Requirement in Invoice in GST

Home » Blogs » HSN Code Requirement in Invoice in GST

Published Date:  08-01-2024   Author:   ca-gitesh-bajaj
captainbiz hsn code requirement in invoice in gst

Update from National Informatics Centre:

Enhancements to E-Way Bill System – HSN Code Requirements (Date: 05-01-2023)

– In alignment with Notification No. 78/2020-Central Tax from 15th October 2020, businesses recording an Annual Aggregate Turnover (AATO) exceeding Rs. 5 Crores are now required to furnish a minimum 6-digit HSN code for all B2B and international transactions. For businesses with AATO below Rs. 5 Crores, the mandate is to provide a 4-digit HSN code.

– These requisites will be integrated into the e-way bill system starting 15th February 2024. We urge all affected taxpayers to update their invoicing systems accordingly to incorporate the 4 or 6-digit HSN codes when generating e-way bills online or via API after this date.

How Does this Impact You?

Now you need to Generate E-way Bills containing 4-digit or 5-digit HSN codes as per the applicability from 15th Oct 2020, as this lock will be Implemented by NIC on E-way Bill Portal.

HSN Code Requirements on Invoice

What is HSN Code?

– A harmonised system of Nomenclature (HSN) Has been adopted for the classification of goods. The harmonised commodity description and coding system also known as the harmonised system of tariff nomenclature is an internationally standardised system of names and numbers to classify traded products. The World Customs Organisation (WCO) Has been administering a 6-digit HS course schedule. The HS courts have been used for import-export trades all over the world.

– Accordingly, the supplies need to be embarked with HSN code for goods and Service Accounting Codes (SAC) for Services.

start free trial of gst billing software

– It shall be mandatory in the case of exports and imports to specify the HSN code at 8 digits and the accounting code for services.

– 1st Proviso to Rule 46 – Tax Invoice

(Substituted vide Notification No. 79/2020-CT dated 15.10.2020)

“ Provided that the Board may, on the recommendations of the Council, by notification, specify-

(i) the number of digits of Harmonised System of Nomenclature code for goods or services that a class of registered persons shall be required to mention; or

(ii) a class of supply of goods or services for which specified number of digits of Harmonised System of Nomenclature code shall be required to be mentioned by all registered taxpayers; and

(iii) the class of registered persons that would not be required to mention the Harmonised System of Nomenclature code for goods or services “

– Notification No. 12/2017 –Central Tax dated 28th Jun 2017

For Period from 1st July 2017 till 31st March 2021

Serial Number Annual Turnover in the preceding Financial Year Number of Digits of Harmonised System of Nomenclature Code (HSN Code) Relief if any
1. Upto 1.5 Crore Nil No requirement to mention HSN.
2. More than 1.5 Crore But upto 5 Crore 2 Compulsory for Both B2B and B2C
3. More than 5 Crore 4 Compulsory for Both B2B and B2C

 

start free trial of gst billing software

– Notification No. 78/2020 –Central Tax dated 15th Oct 2020

As per this Notification w.e.f 1st April 2021, the following is requirements of the HSN Code

Serial Number Aggregate Turnover in the preceding Financial Year Number of Digits of Harmonised System of Nomenclature Code (HSN Code) Relief if any
1. Upto 5 Crore 4 May not mention the number of digits of HSN Code, in  a  tax  invoice  issued  by  him under the said rules in respect of supplies made to unregistered persons
2. More than 5 Crores 6 COMPULSORY

– Notification No. 90/2020 –Central Tax dated 1st Dec 2020

Vide this Notification, CBIC has specified the names of 49 Chemicals in respect of which the registered person shall be required to mention 8 digits of HSN codes in the tax invoice issued by him.

S.No. Chemical name HSN Code
1 Mixture of (5-ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl) methyl methyl methylphosphonate (CAS RN 41203-81-0) and Bis [(5-Ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl)methyl] methylphosphonate (CAS RN42595-45-9) 38249100
2 Dimethyl propylphosphonate 29313200
3 (5-Ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl)methyl methyl methylphosphonate 29313600
4 Bis[(5-Ethyl-2-methyl-2-oxido-1,3,2-dioxaphosphinan-5-yl)methyl] methylphosphonate 29313700
5 2,4,6-Tripropyl-1,3,5,2,4,6-trioxatriphosphinane 2,4,6-trioxide 29313500
6 Dimethyl methylphosphonate 29313100
7 Diethyl ethylphosphonate 29313300
8 Methylphosphonic acid with ( aminoiminomethyl) urea ( 1: 1) 29313800
9 Sodium 3-(trihydroxysilyl) propyl methylphosphonate 29313400
10 2,2-Diphenyl-2-hydroxyacetic acid 29181700
11 2-(N,N-Diisopropylamino)ethylchloride hydrochloride 29211400
12 2-(N,N-Dimethylamino)ethylchloride hydrochloride 29211200
13 2-(N,N-Diethylamino)ethylchloride hydrochloride 29211300
14 2-(N,N-Diisopropylamino)ethanol 29221800
15 2-(N,N-Diethylamino )ethanethiol 29306000
16 Bis(2-hydroxyethyl)sulfide 29307000
17 2-(N,N-Dimethylamino)ethanethiol 29309092
18 Product from the reaction of Methylphosphonic acid and l,3,5- Triazine-2,4,6- triamine As applicable
19 3-Quinuclidinol 29333930
20 R-(- )-3-Quinuclidinol 29333930
21 3,9-Dimethyl-2,4,8,10-tetraoxa-3,9-diphosphaspiro [5.5] undecane 3,9- dioxide 29313900
22 Propylphosphonic dichloride 29313900
23 Methylphosphonic dichloride 29313900
24 Diphenyl methylphosphonate 29313900
25 O-(3-chloropropyl)O-[4-nitro-3-(trifluoromethyl)phenyl] methylphosphonothionate 29313900
26 Methylphosphonic acid 29313900
27 Product from the reaction of methylphosphonic acid and 1,2- ethanediamine As applicable
28 Phosphonic acid,methyl-, polyglycol ester (Exolit OP 560 TP) 38249900
29 Phosphonic acid,methyl-,polyglycol ester (Exolit OP 560) 38249900
30 Bis (polyoxyethylene) methylphosphonate 39072090
31 Poly(1,3-phenylene methyl phosphonate) 39119090
32 Dimethylmethylphosphonate, polymer with oxirane and phosphorus oxide 38249900
33 Carbonyl dichloride 28121100
34 Cyanogen chloride 28531000
35 Hydrogen cyanide 28111200
36 Trichloronitromethane 29049100
37 Phosphorus oxychloride 28121200
38 Phosphorus trichloride 28121300
39 Phosphorus pentachloride 28121400
40 Trimethyl phosphite 29202300
41 Triethyl phosphite 29202400
42 Dimethyl phosphite 29202100
43 Diethyl phosphite 29202200
44 Sulfur monochloride 28121500
45 Sulfur dichloride 28121600
46 Thionyl chloride 28121700
47 Ethyldiethanolamine 29221720
48 Methyldiethanolamine 29221710
49 Triethanolamine 29221500

 

Disclaimer –

Please note that the insights shared here are based solely on my personal interpretation of the GST Law, aimed at enhancing general understanding. These views should not be considered as professional advice. For specific circumstances and detailed interpretation, consulting the GST Law directly is advisable. This is shared in good faith, and I am not responsible for any implications arising from the use of this information.

 

 

CA Gitesh S. Bajaj

Gitesh Bajaj & Associates

Aurangabad

Ph. 9403586219

📧: Gitesh.Bajaj@gbassociates.org

How do I determine the correct HSN code for a chemical product

Spread the love

Gitesh Bajaj

Chartered Accountant specializing in Indirect Taxation and GST, registered with ICAI. Experienced in managing GST Annual Returns for corporations, conducting GST-focused Internal Audits, and filing various GST returns. Knowledgeable in SEZ, EOU & FTP Compliances.

Leave a Reply