HSN wise summary details to be filled in GSTR1 from April 2021

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                          HSN code on invoices from 1st April

Basis on the aggregate turnover in the previous financial year, the larger businesses are required to capture the 6-digit HSN code and 4 digits for the smaller businesses.

Businesses whose aggregate Turnover in the preceding financial year is more than 5 crores are required to mention the HSN code at a 6-digit level. Businesses with aggregate turnover of up to 5 crores are required to capture 4-digit HSN code.

 

Aggregate Turnover in the preceding Financial Year

Number of Digits of HSN Code

Up to 5 crores

4 digits

Exceeding 5 Crores

6 Digits


        Types of invoices on which HSN code is mandatory

Now, the next question is that, should it be mentioned on all the types of invoices or only on B2B invoices? To answer, there are different guidelines for larger and small businesses having turnover up to 5 crores.

Businesses with aggregate turnover exceeding 5 crores in the preceding financial year i.e. 2020-21, should mandatorily declare HSN code at 6 digits on all tax invoices including B2C supplies. Business aggregate Turnover up to 5 crores in 2020-21, are mandated to capture 4 digits HSN only on the B2B tax invoices. For B2C supplies, it is optional.

The below table summarises the mandatory and optional provisions of declaring HSN on different supplies.

Supplies

Exceeding 5 Crore

Up to 5 Crore

B2B supplies

Mandatory

Mandatory

B2C supplies

Mandatory

Optional

                                         HSN Code in GSTR-1

Just like it is mandatory to mention HSN code at 6 and 4 digits on invoices, GST returns too needs to be reported with HSN code. Businesses with an aggregate turnover exceeding 5 crores in the preceding financial year, need to upload HSN summary with 6 digits HSN code in GSTR-1 starting from 1st April,2020.

In the same way, businesses with an aggregate turnover up to 5 crores, need to upload HSN summary with 4 digits HSN code in GSTR-1 return. However, businesses can choose to mention HSN code at more digits optionally. Businesses up to 5 cores can mention HSN at 6 or 8 digits and businesses exceeding 5 crores, can optionally mention HSN at 8 digits. 

The effect of HSN summary in GSTR-1 return, both in GST portal and the offline tool was made in the month of May'21. Therefore, the new change will be effective starting from May month’s GSTR-1, to be filed in June 2021. In case of quarterly GSTR-1, you need to furnish the details at 4 digits in April to June’21 GSTR-1, to be filed in July,2021.

With this change, you need to report the HSN code of 6/4 digits mandatorily in HSN summary i.e., table 12 of GSTR-1. Also, the 'total value' in HSN summary is replaced with 'Rate of Tax'  meaning you need to furnish HSN-wise rate-wise details now.




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Comments

  1. TaxSpannerAugust 2, 2024 at 5:39 PM

    GST compliance refers to obeying the rules and regulations governing the Goods and Services Tax system in a specific jurisdiction. You can also check out about GST Compliance Services here.

    ReplyDelete

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