What's New Details

Ministry of Finance


DATED 31-3-2021

HSN Code/ Service Accounting Code mandatory on invoices as per revised requirement from 1st April 2021 for GST taxpayer with turnover of more than Rs 5 crore.

With effect from the 1st April, 2021, it has been made mandatory for a GST taxpayer, having turnover of more than Rs 5 crore in the preceding financial year, to furnish 6 digits HSN Code (Harmonised System of Nomenclature Code), or as the case may be, SAC (Service Accounting Code) on the invoices issued for supplies of taxable goods and services. A taxpayer having turnover of upto Rs 5 crore in the preceding financial year  is  required to  mandatorily furnish 4  digits  HSN  code  on  B2B  invoices. Earlier,  the requirement was 4 digits and 2 digits respectively. For more details, notification No. 78/2020-Central Tax, dated 15.10.2020 may  be  referred to  (accessible at https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-79-central-tax-english-2020.pdf)

Accordingly, with effect from the 1st April, 2021, GST taxpayers will have to furnish HSN/SAC in their invoices, as per the revised requirement

HSN codes for goods at 6 digits are universally common. Therefore, common HSN codes apply to Customs and GST. Accordingly, codes prescribed in the Customs tariff are used for the GST purposes too(as has been specifically mentioned in the GST rate schedule). In Customs Tariff, HS code is prescribed as heading (4  digits  HS),  sub-heading (6  digits  HS)  and  tariff  items  (8  digits). These documents are accessible on the CBIC web-site. The Customs Tariff may be accessed at https://www.cbic.gov.in/htdocs-cbec/customs/cst2021-020221/cst-idx for HSN codes.

GST  rate  schedule for  goods and  services may  be  accessed at https://www.cbic.gov.in/htdocs-cbec/gst/index-english  and  then follow the  path GST Rates/Ready reckoner-Updated Notifications/Finder  GST Rates Ready Reckoner/Updated Notifications.

Further, HSN search facility is also available on the GST portal.

Manufacturers and  importers/exporters  have  been  commonly using  HSN  Codes. Manufacturers were furnishing these codes even in the pre-GST regime. Importers and exporters have been furnishing these codes in import/export documents. Traders would mostly be using HSN codes furnished in the invoices issued to them by the manufacturer or importer suppliers. As such, a large number of GST taxpayers are already furnishing HS codes/SAC at 6/8 digits on voluntary basis on the invoices, e -way bills and GSTR1 returns.