HSN Code on Invoice

Under GST Invoice Rules and Format, suppliers are required to mandatorily display the HSN code or SAC code of the goods or services supplied. However, in order to make compliance easier for small and medium sized enterprises, the requirement for disclosing HSN code on invoice has been relaxed. In this article, we look at the rules concerning display of HSN code on the invoice in detail.

What is HSN Code?

HSN Code is an internationally accepted goods classification system used in over 200 countries. Under the HSN code system, goods have been classified into 97 different chapters. HSN code consists of 6 digits.

The HSN code chapter is represented in the first two digits of the HSN code.

The heading of the goods is represented in the third and fourth digit of the HSN code.

The sub-heading of the goods is represented in the fifth and sixth digit of the HSN code.

With the HSN code acting as a universal classification for goods, the Indian Government has decided to adopt the use of HSN code for classification of goods under GST and levy of GST.

Find HSN Code and GST Rate for all goods.

GST Tax Invoice Format

According to the GST rules and regulations, all suppliers of goods or services are required to issue a tax invoice mandatorily, when the value of supply is over Rs.200. The tax invoice issued under GST is required to contain the following information:

1. Name, address and GSTIN of the supplier.
2. Invoice number not exceeding sixteen characters.
3. Date of tax invoice.
4. Name, address and GSTIN of the customer, if available.
5. HSN code for goods or SAC code for services.
6. Description of goods or services.
7. Quantity supplied.
8. Total value of supply.
9. Taxable value of the supply.
10. Rate and amount of GST
11. Place of supply

A sample GST tax invoice is attached below:

HSN Code on Invoice

Many small businesses might find it cumbersome to find and update HSN code for the goods supplied. Hence, to reduce the compliance burden of small businesses, the GST Council has relaxed the requirement for displaying HSN code on invoices based on the sales turnover.

As per Notification No. 12/2017 – Central Tax dated 28th June, 2017, HSN code on the invoice can be displayed as follows:

• Entities having less than Rs.1.5 crores annual turnover in the preceding financial year will not be required to display HSN code on the invoice.
• Entities having Rs.1.5 crores to Rs.5 crores annual turnover in the preceding financial year will be required to display the first two digit (Chapter) of the HSN code on the invoice.
• Entities having more than Rs.5 crores annual turnover in the preceding financial year will be required to display the first two digit (Chapter) and chapter heading of the HSN code on the invoice. Thus, only entities having more than Rs.5 crores of annual turnover would be required to display 4 digit HSN code on the invoice.

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