MENTIONING OF HSN CODES IN
INVOICES IN GST REGIME
The Goods and Services Tax Act, 2017 came into force
in India from 1.7.2017 onwards.
In the earlier acts, the commodity codes
and schedules may differ state to state and rate of tax differ from state to
state. The rate of tax for the same commodity may vary as exempt, 1%, 2%,
5%, 14.5% etc. state to state. In the GST Act, instead of Commodity code HSN
Codes were prescribed and the suppliers of goods has to mention the HSN Codes
in their invoices in order to avoid misclassification of goods. The rate of tax
fixed under the GST for goods using the HSN Codes will be the same all over
India without any deviation as decided by the GST Council. Due to
the introduction of HSN Code mismatch in commodity will not arise if correct
HSN code applied for supplies between supplier and recipient.
Mentioning HSN Codes by small taxpayers
were very difficult and hence the Government of India has issued Notification
stating that a registered person having annual turnover in the preceding financial
year shall mention the digits of HSN Codes in the tax invoice as shown below:
TABLE
Sl.No.
|
Annaul Turnover in the
preceeding Financial Year
|
Number of Digits of HSN
Code
|
(1)
|
(2)
|
(3)
|
1.
|
Upto
rupees one crore fifty lakhs
|
NIL
|
2.
|
More
than rupees one crore fifty lakhs and upto rupees five crores
|
2
|
3.
|
More
than rupees five crores
|
4
|
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