Big news for taxpayers … Govt makes crucial change in GST rules

Ajeyo Basu

LAST UPDATED: March 31, 2021, 4:40 p.m.

New Delhi: With effect from April 1, 2021, it has been made mandatory for a GST taxpayer, having turnover of more than five crore rupees 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 a turnover of up to five crores 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.

Accordingly, with effect from April 1, 2021, GST taxpayers will have to furnish HSN/SAC in their invoices, as per the revised requirement.

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 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 website. 

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.

READ ALSO :  Bye Bye Donald Trump? Star rapper Kanye West announces bid for US presidential election

Source link

Leave a Comment