whether HSN MANDATORY FOR B2C TURNOVER BELOW 5Cr?

HSN codes are not mandatory for B2C (Business-to-Consumer) supplies for businesses with an annual turnover below Rs. 5 crores.

Here’s a summary of HSN code requirements:

• Turnover above Rs. 5 crores:
  • Mandatory: Must use 6-digit HSN code for all invoices (both B2B and B2C).
• Turnover upto Rs. 5 crores:
  • B2B invoices: Must use 4-digit HSN code.
  • B2C invoices: HSN code is optional.  

    Refer NOTIFICATION NO. 78/2020 – CENTRAL TAX DATED 15-10-2020

• GST, HSN Code, B2C, B2B, Turnover, Tax Invoice, GST Rules, GST Compliance, Tax, Business, Finance, India

HSN code is 8 digit code. Service Accounting Code is 6 digit code. However, in invoice, relaxation can be given by CBI&C in indicating the number of digits of HSN code for goods or the Accounting Code for services for class of registered persons – – first proviso to Rule 46 of CGST and SGST Rules, 2017.

The relaxation is as follows –

HSN Code in GST Tax Invoice

In case of taxable persons having : –

Annual Turnover in preceding year upto Rs 1.5 Crore : HSN Code is not required to be mentioned in tax Invoice.

Annual turnover in preceding year above Rs 1.50 crore but below Rs 5 crore :  HSN code at two digit level (i.e. only chapter number) is required in tax Invoice.

Annual turnover in preceding year above Rs 5 crores, HSN code at four digits level is required

Refer  Notification No. 12/2017-Central Tax dated 28-6-2017 and Notification No 5/2017 Integrated Tax dated 28-6-2017,

Note : Annual Turnover not defined under GST Act .

“aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess; [ Section 2(6) of CGST Act 2017 ]

“turnover in State” or “turnover in Union territory” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess;[ Section 2(6) of CGST Act 2017 ]

HSN Code under GST : Free Study Material

HSN Code GST

(Chapter 1 – 5 ) – Section I-Live Animals; Animal Products

 (Chapter 6-14 ) – Section II-Vegetable Products

(Chapter 15 ) – Section III-Animal or Vegetable Fats and Oils and their cleavage Products; Prepared Edible fats; animal or Vegetable waxes

• Chapter 15: Animal or Vegetable Fats and Oils and their Cleavage Products; Prepared Edible Fats; Animal or Vegetable Waxes

(Chapter 16 -24 ) – Section IV-Prepared Foodstuffs; Beverages, Spirits and Vinegar; Tobacco and Manufactured Tabacco substitutes

(Chapter 25 -27 ) – Section V-Mineral Products

(Chapter 28 -38 ) – Section VI-Products of the Chemicals or Allied Industries

(Chapter 39 – 40 ) – Section VII-Plastics and Articles thereof; Rubber and Articles Thereof

(Chapter 41 – 43 ) – Section VIII-Raw Hides and Skins, Leather, Furskins and Articles thereof; saddlery and Harness; travel goods, Handbags and similar Containers; Articles of animal gut (other than silk-worm Gut)

(Chapter 44 -46 ) – Section IX-Wood and Articles of Wood; Wood Charcoal; cork and articles or cork; Manufactures of Straw, of Esparto or of other Plaiting Materials; Basketware and Wickerwork

(Chapter 47 -49 ) – Section X-Pulp of wood or of other Fibrous Cellulosic Material; Recovered (Waste and Scrap) Paper or Paperboard; Paper and Paperboard and articles thereof

(Chapter 50 -63 ) – Section XI-Textile and Textile Articles

(Chapter 64 -67 ) – Section XII-Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, seat-sticks, whips, Riding-crops and Parts thereof; Prepared Feathers and articles Made therewith; artificial Flowers; Articles of Human Hair

(Chapter 68 -70 ) – Section XIII-Articles of Stone, Plaster, Cement, Asbestos, Mica or similar Materials; Ceramic Products; Glass and Glassware

(Chapter 71 ) – Section XIV-Natural or Cultured Pearls, Precious or Semi-Precious Stones, Precious Metals, Metals clad with Precious Metal, and articles thereof; Imitation Jewellery; Coin

(Chapter 72 -83 ) – Section XV-Base Metals and Articles of Base Metal

(Chapter 84 – 85 ) – Section XVI-Machinery and Mechanical Appliances; Electrical Equipment; Parts thereof; sound Recorders and Reproducers, Television Image and Sound Recorders and reproducers, Television Image and sound Recorders and Reproducers, and Parts and Accessories of such article

(Chapter 86 – 89 ) – Section XVII-Vehicles, Aircraft, Vessels and Associated Transport Equipment

(Chapter 90 – 92 ) – Section XVIII-Optical, Photographic, Cinematographic, measuring, checking, precision, medical or surgical Instruments and apparatus; clocks and watches; musical instruments; part and accessories thereof

(Chapter 93 ) – Section XIX-Arms and Ammunition; Parts and Accessories thereof

(Chapter 94 – 96 ) – Section XX-Miscellaneous Manufactured Articles