HSN CODES MANDATORY 1ST APRIL 2020 ON GST TAX INVOICES
Table of Contents
HSN CODES
HSN stands for ‘Harmonized System Nomenclature. The specified codes helps to identify the correct classification of goods all across the globe in a standardized manner. HSN CODES MANDATORY 01.04.2020
SAC CODES
SAC Codes stands for Services Accounting Code. SAC codes has been issued by CBEC to ensure correct classification of services in GST. Each services can be identified by its unique SAC.
HOW READ HSN CODES
HSN Codes is of 6 digits with following bifurcations
- First 2-digit represents HSN chapter code
- Next 2-digit i.e. third and forth digit represents heading of goods
- Next 2-digit i.e. fifth and sixth digit represents sub-heading of goods
WHY HSN CODES ON GST TAX INVOICE
As per Notification No. 12/2017 – Central Tax dated 28th June 2017, the concerned individual shall display the HSN code on the invoice by the following:
- Entities having less than Rs.1.5 crores annual turnover in the preceding financial year will not be required to display the codes on the invoice.
- Entities having Rs.1.5 crores to Rs.5 crores annual turnover in the preceding financial year will be required to display the first two-digit (Chapter) of the HSN code on the invoice.
- Entities having more than Rs.5 crore as annual turnover in the preceding financial year should display the first two-digit (Chapter) and chapter heading of the HSN code on the invoice. Thus, only entities having more than Rs.5 crore of annual turnover shall display 4 digit the codes as displayed in the invoice.
CIBC NOTIFICATIONS 06/2020 – INTEGRATED TAX
Every GST registered persons has to mandatorily quote either 4 or 6 digit HSN/SAC Code wef 1st April 2021.
Criteria
| Sl no | Aggregate Turnover in the preceding Financial Year | No of digits HSN |
| 1 | Turnover upto Rs 5 Crores | 4 digit of HSN |
| 2 | Turnover more than Rs 5 Crores | 6 digit of HSN |
Exemptions –HSN CODES MANDATORY 01.04.2020
Every registered person having turnover less than 5 crores may not mention HSN codes on outward supply to unregistered dealers.
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