6 digits HSN Code now mandatory for GST taxpayers, check direct link here

The codes prescribed in the Customs tariff are used for the GST purposes too as has been specifically mentioned in the GST rate schedule.

New Delhi: The Ministry of Finance has said that GST taxpayer with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services. The rule has been effective from April 1, 2021.

"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," an official release said.

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.
  
• 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 GSTR 1 returns.