HSN /SAC Code mandatory from 01.04.2021


Under Notification No. 78/2020 dated 15.10.2020 HSN (Harmonised System of Nomenclature Code) /SAC (Services Accounting Code) is mandatory in the invoices from 01.04.2021.

What is HSN/ SAC Code:

Currently in India we have an 8-digit structure of an HSN / SAC Code, wherein the first 2 digits define the Chapter where the good or service is listed in the Code list, at 4-digit level are the headings, at 6 digits are the subheadings and finally at 8 digits are the tariff items for more precise classification.

Turnover Requirement:

 

Turnover INR (previous Financial Year)

           HSN /SAC Code

< 5 Crores

   4         Digits

>5 Crores

                6     Digits

Export and imports of goods not for services.

                8     Digits

 

How to generate:

From where we can get the HSN/SAC Code

Step 1. www.gst.gov.in

Step 2. Select Services

Step 3. User Services

Step 4. Select HSN/SAC Code

Step 5. Select HSN/SAC Chapter by Name or Code

Where to Declare the HSN/ SAC Code:

The HSN / SAC code needs to be declared on the tax invoice and also to be reported while filing the Table -12 of GSTR-1 i.e. return that summarizes all outward supplies of a taxpayer. The codes need to be disclosed only in respect of B2B supplies and optional in case of B2C supplies for a registered person having aggregate turnover upto INR 5 crores in the previous financial year.

Penalty:

Moreover, it is 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 Service Tax, 2017 (i.e., General penalty).

 

Disclaimer: The facts and opinions written in this column are those of the author and have been prepared on the basis of relevant provisions and information available at the time of preparation. The article does not constitute any professional advice or a formal recommendation. The author has undertaken the utmost care to disseminate true and correct views and does not accept liability of any errors or omissions.

 

 


Having rich experience in various profiles related to Taxation, Audit, Accounting, etc., within India and Abroad.

More Articles from Tax Grip

Extension of Income Tax due dates for the A.Y 2021-22 related to the Financial Year 2020-21

Image
The Central Board of Direct Taxes, in exercise of its power under section 119 of the Income-tax Act, 1961, provides relaxation on Income Tax due dates as per Circular 9 of 2021 dated 20 th May 2021. Sr. No. Compliances Financial Year Rules/Acts Original Due Date Extended Due Date 1 Statement of Financial Transactions (SFT) for the Financial Year 2020-21 Rule 114E of Income Tax Rules,1962 On or Before 31st May ,2021 On or Before 30th June, 2021 2 Statement of Reportable Acount   for the calendar Year 2020 Rule 114G of Income Tax Rules,1962 On or Before 31st May ,2021 On or Before 30th June, 2021 3 Statement of Deduction of Tax for the last Quarter of the   Financial Year 2020-21 Rule 31A of Income Tax Rules,1962 On or Before 31st May ,2021 ...
Read more

Tax on Capital Gain : Calculation and Indexation

Image
  CALCULATION AND INDEXATION IN CAPITAL GAIN How to calculate Capital Gain? Capital Gain arising on transfer of a short-term capital asset is short-term capital gain, whereas transfer of a long-term capital asset is long term capital gain. The tax incidence is higher in case of short term capital gain in comparison to long term capita gain. Short Term Capital Gain Full value consideration:   The consideration received or receivable by the assessee
Read more

The Technical Aspects of the Scheme of Input Tax Credit (ITC)

Image
  The technical aspects of the scheme of Input Tax Credit (ITC) A.   Who can avail ITC? Any registered person can avail credit of tax paid on the inward supply of goods or services or both, which is used or intended to be used in the course or furtherance of business. B. What are the pre-requisites for availing credit by registered person? a. He is in possession of tax invoice or any other specified tax paying document. b. He has received the goods or services. “Bill to ship” scenarios also included. c. Tax is actually paid by the supplier. d. He has furnished the return. e. If the inputs are received in lots, he will be eligible to avail the credit only when the last lot of the inputs is received. f. He should pay the supplier, the value of the goods or services along with the tax within 180 days from the date of issue of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1)...
Read more

Tax on Capital Gain: Definition, Types and Tax Rates

Image
  CAPITAL GAIN TAX IN INDIA   DEFINITION, TYPES AND TAX RATES   Capital Gains Tax Capital gain can be defined as any profit or gain that is arises from the sale of a ‘capital asset.’ The gain or profit that is received comes under the ‘income’ category. Therefore, a tax needs to be paid on the income that is on transfer of a capital asset. The tax that is paid is called capital gains tax, which can either be long term or short term. As per Income Tax Act, capital gains tax is not applicable in case the individual inherits the property as there is only transfer of ownership and no sale of property. Any capital asset received on inheritance or will is not taxable. However, if the person who has inherited the property decides to sell it, tax will have to be paid on the income that has been generated from the sale. Profits or gains arising in the previous year in which the transfer took place shall be considered as income of the previous year which is charg...
Read more

New Form ITR-U Under Section 139(8A) for updated Income Tax Returns

Image
New Form ITR-U Under Section 139(8A) for updated Income Tax Returns   The CBDT has notified a new form for filing updated Income Tax returns in which taxpayers will have to give the exact reason for filing it along with the amount of income to be offered to tax. Commence from which Financial Year: The return has to be filed Under Section 139(8A) relating to the Assessment Year commencing from 01.04.2020 and subsequent assessment years. The new form (ITR-U) will be available to taxpayers for filing updated income tax returns from the Financial Year 2019-20. Eligibility of filing ITR-U: Taxpayers filing ITR-U, which can be filed within 2 years of the end of the relevant assessment year, will have to give reasons for updating the income – v      v return previously not filed, or v      v income not reported correctly, or v      v wrong heads of income chosen, or v      v reduction of carried forward loss, ...
Read more

No GST Audit (GSTR-9C) - Union Budget 2021

Image
The Union Finance Minister, Smt. Nirmala Sitharaman while presenting the Budget Speech on  1st day of February 2021, before the Parliament, proposed: Clause 101 of Finance bill to omit Sub-section (5) of section 35 of the CGST Act so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional. Clause 102 of Finance bill to substitute Section 44 of the CGST Act so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professionals and provide for filing of the annual return on self-certification basis. It also provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return. This is to come in effect from a date to be notified later. The GSTR-9C is a reconciliation statement required to be furnished by a taxpayer whose turnover exceeds rupees two crores in a financial year while filing his ann...
Read more