Report 6-digit HSN code in GSTR-1 filed on or after 1st August 2022
GST Revenue

The part-II of the first phase of mandatory HSN code implementation on the GST portal has gone live since 1st August 2022. Under this part, all taxpayers with a total turnover of more than Rs.5 crore in the previous financial year must report a six-digit HSN code for all invoices in their GSTR-1. The rest of the taxpayers must comply with part-I of the first phase.

The government had earlier notified that businesses must mandatorily mention a minimum of four or six digits of the HSN code in Table 12 of the GSTR-1. The limit is based on the aggregate turnover earned during the previous financial year as laid down in the Central Tax notification no. 78/2020 issued on 15th October 2020.

This notification was implemented in a phased manner, with part I of the first phase beginning from 1st April 2022. During this phase, a four-digit HSN code became compulsory for those with a turnover of more than Rs.5 crore. In contrast, those with up to Rs.5 crore turnover had to report a two-digit HSN code. 

Businesses in upper turnover can manually report the six-digit HSN code in Table 12 of GSTR-1. Suppose the user enters a wrong HSN code, then a warning or alert message appears, but they can continue to file GSTR-1 without the need to correct it. However, the user is expected to rectify the errors by reporting the correct format of the HSN code.

Taxpayers filing GSTR-1 for July 2022 during August 2022 must take note of the above requirement. Suppose users are using any other software or ERP to extract GSTR-1 data. In that case, they must report the six-digit HSN code in the proper format before importing data into the government portal to avoid any errors.

The plans for phases 2 to 4 shall be communicated in the later months by the GST Network. Although the notification came into effect on 1st April 2021, it is being implemented in phases on the GST portal starting from 1st April 2022.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in

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