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Home > GST > Help Center > HSN/SAC Last Updated: Apr 06th 2023

What HSN/SAC details to be declared in GST Returns, Invoices?

GST Council revised the HSN and SAC code declaration requirement part of the GSTR-1 Return and Invoices to have better compliance and reporting. Know more about HSN/SAC Codes, Indication of such details in GST Returns and Invoices, how to report in GSTR-1, penalty for non-compliance

HSN/SAC code requirement with GST Return and Invoices

This document covers

  1. What are HSN or SAC?
  2. HSN/SAC Reporting requirement before 31st March 2021
  3. HSN/SAC Reporting requirement after 01st April 2021
  4. Reporting in GSTR-1
  5. Penalty for Non-Compliance

1. What are HSN or SAC?

HSN or HS (Harmonized Commodity Description and Coding System) is a standardized system of nomenclature of different goods developed by World Customs Organization, which is accepted globally. HSN uses 6 digits uniform codes to classify different goods. India uses eight-digit codes for more specific and precise classification

  1. HSN Code: HSN (Harmonised System of Nomenclature) is used for classifying the Goods under GST.
  2. SAC Code: SAC (Services Accounting Code) is used for classifying the Services under GST.

Find HSN / SAC Codes along with the GST Rates to be used in Tax Invoices.

2. HSN/SAC Reporting requirement before 31st March 2021

Indication of HSN or SAC Code details in GST Returns (GSTR-1) and Invoices till 31st March 2021 are as follows

  • CBIC has notified the minimum number of HSN/SAC code that the taxpayer needs to indicate in GST returns and Invoices through Notification No 12/2017 dated 28/06/2017.
  • The Taxpayer needs to report the HSN/SAC code for each product or service they sell, depending on the turnover in the preceding financial year (eg. for FY 2020-21, FY 2019-20 turnover to be considered.)
S.NoAnnual Turnover in the preceding Financial YearNumber of digits of HSN/SAC Code
1Upto Rs 1.5 CroreNil
2More than Rs 1.5 Core and Less than Rs 5 Crore2
3More than Rs 5 Crores4

3. HSN/SAC Reporting requirement after 01st April 2021

CBIC has amended the notification 12/2017 vide notification no 78/2020 to mandate disclosure of HSN/SAC codes in GST Returns (GSTR-1) and Tax Invoices from 01st April 2021 are as follows

S.NoAnnual Turnover in the preceding financial yearNumber of digits of HSN/SAC Code
1Upto Rs 5 Crore
  • For B2B Tax Invoices - 4 digits (Mandatory)
  • For B2CS Tax Invoices - 4 digits (Optional)
2More than Rs 5 Crore6 digits (Mandatory for B2B and B2CS)

4. Reporting in GSTR-1

HSN/SAC codes are required to be entered in GSTR-1. Description of each item in the Invoices need not be uploaded in GSTR-1 but the HSN/SAC needs to be entered for each product and/or service.

Taxpayers who use Books software need to enter the HSN or SAC code in the Product Master, so that the HSN/SAC information would automatically brought in to the GSTR-1 Return based on the previous year turnover. Also refer How to create a GST ready Invoice

5. Penalty for Non-Compliance

  • Every Taxpayer needs to report correct HSN/SAC Code on Tax Invoices and GSTR-1.
  • Penalty of Rs 50000 ( Rs 25000 under CGST and Rs 25000 under SGST) would be levied for non-mentioning of HSN/SAC or wrong mentioning of HSN/SAC in GST Returns and Tax Invoices.

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