Mandatory Requirements of HSN in Invoice

Mandatory Requirements of HSN in Invoice

What is HSN Code?

Hsn Code is Internationally recognized Number codes for classifying goods and services, facilitating systematic and uniform taxation across borders. Incorporating Hsn Codes in to Gst returns ensures consistency, reduces ambiguities, and streamlines the Tax filing Process.

No of Digits in HSN Codes?

HSN Code is a 6-digit uniform code classifying over 5000+products, However in India there's an 8 digit HSN Code, Here the first 2 digits represents the chapter number, the next 2 digit denote the heading number, the following 2 digit constitute the sub-heading, and the last 2 digits represent the tariff item. 

Applicability of HSN Code and how many digit shown in Invoice?

What is Preceding Financial Year for computing Aggregate Turnover?

If you are filing Gst return of April 2025 month the preceding financial year is  2024-25 I.e from April 2024 to 31^st March 2025. 

How to Compute Aggregate Turnover?

Aggregate turnover means the the aggregate value of all taxable supplies excluding the supplies on which tax is payable by a person on reverse charge basis.

- Exempt Supplies

- Export of Goods and services

- Inter-state supplies of persons having the same pan computed on all India Basis.

Components not included in aggregate Turnover

- Taxable sales shall exclude RCM Purchases

- Sales subject to RCM must be included in taxable supplies.

- Do not consider tax components such as central tax, state tax, union territory tax, integrated tax and cess.

Where HSN shown in Gst?

It is shown in GSTR-1 Table No-12 need the following information to be filled

1. HSN NO
2. Description
3. Product name as in Master
4. UQC
5. Total Quantity
6. Total Taxable Value
7. Rate
8. Integrated Tax
9. Central tax
10. State Tax
11. Cess

Penalty in case of HSN not mentioned in Invoice?

If HSN is not mentioned in Invoice then penalty is about of Rs 25,000 each CGST and SGST.

Frequently Asked Question FAQ’S

For whom HSN is Mandatory in Invoice?

HSN is mandatory for all GST Taxpayers who are registered in GST whether his Turnover is Nil or above 5 core. There is limit on digit to be shown in Invoice as per the Turnover Criteria.

Why HSN is Bring in to the System of GST?

HSN is bring in to the structure of GST to classify the goods and its classification is uniform for all countries who accepted GST Indirect Tax Structure.

Penalty in Case of HSN is not mentioned in Invoice?

If HSN is not mentioned in Invoice then penalty is about of Rs 25,000 each CGST and SGST.