Taxpayers under GST are mandated to declare specified digits of HSN/ SAC at the time of raising invoices with effect from 1.4.2021, in accordance with Notification No. 12/2017-Central Tax dated June 28, 2017.
In case the aggregate turnover in the preceding financial year is upto INR 5 crores, the number of digits will be 4. However, if the turnover is more than INR 5 crores, the number will be 6.
In the instances where the taxpayer reports only the first 6 digits out of an otherwise valid 8-digit HSN, which is actually not available in Tariff at 6-digit level and with no corresponding description of goods, the same will be treated as invalid. Hence, taxpayers should not be creating 6 digit HSN code by removing last two digits of a valid 8 digit HSN code.
It should be noted that the numbers specified in the notification are the minimum number of digits of HSN to be mentioned on the invoice.