HSN Code and GST Rate

Hey @TeamQuicko

Who has to mandatorily write the HSN code on an invoice?

Hey @HarishMehta

From 1st April 2021, Taxpayers with an aggregate Annual Turnover of more than INR 5 Crore during the financial Year 2020-2021 have to mandatorily mention 6 digits of the HSN Code in all tax invoices.

Businesses with a turnover of up to INR 5 crore in the preceding financial year will be required to mandatorily furnish 4 digit HSN code on B2B invoices.

Hope this helps!

How to calculate GST using HSN code?

Hey @Dia_malhotra

Let’s take an example of Cocoa powder to calculate the GST using the HSN code.

Cocoa Powder per Kg = INR1,000.
HSN Code = 18 05 00 00
GST Rate = 18% (For Cocoa powder, not containing added sugar or sweetening matter)
Therefore, GST = INR180

Hope this helps!

Hey,

What are the consequences of not mentioning or incorrectly mentioning the HSN Code?

Hey @SonalYadav

It is very crucial to mention the correct HSN/ SAC Code on the tax invoices and Form GSTR-1, barring to do so may attract a penalty of INR 50,000 (INR 25,000 each for CGST and SGST) for non-mentioning or incorrect mention of wrong HSN/ SAC Code under Section 125 of the CGST Act.

Hope this helps!