GST Registration is done through GST Reg-01 Form. While filling this GST Reg-01 Form, you need to mention HSN Codes and SAC Codes.
Here in this article, you will learn about How many HSN codes you can enter into the application form while submitting the GST Registration form. In addition, you will also understand the other important concepts related to HSN Codes that are essential for your business.
What are HSN Codes?
The Harmonized System of Nomenclature (HSN) is a standardized international system for classifying goods.
Thus, the HSN codes are six-digit identifiers that are used to classify goods worldwide.
Furthermore, The HSN system is in place to facilitate international trade by ensuring that goods are classified in a consistent manner.
There are over 5,000 HSN codes, which cover a wide range of products.
Here is the complete list: List of HSN Code with Tax Rates
HSN codes have a variety of purposes, including customs clearance, tariff calculation, and statistical analysis.
In the Goods and Services Tax (GST) regime, HSN Codes in India are used to determine the applicable GST rates for goods.
Example of HSN Code used in GST Registration
The Harmonized System (HS) code has a hierarchical system consisting of 21 sections, 99 chapters, 1,244 headings, and 5,224 subheadings.
As a result, The first two digits represent the chapter number, the next two digits represent the heading number, and the final two digits represent the subheading number.
For instance:
- Firstly, Handkerchiefs made of Textile matters are classified under the Harmonized System (HS) code 62.13.90.
- The first two digits of the HS code, 62, represent the chapter for “Articles of apparel and clothing accessories, not knitted or crocheted”.
- The next two digits, 13, represent the heading for “Handkerchiefs”.
- The last two digits, 90, represent the product code for “Handkerchiefs made of other textile materials”.
How many HSN codes can be included in a GST registration application?
You can add a maximum of 5 HSN Codes in the GST Registration Application.
Importantly, you must have at least one HSN Code mentioned in the GST Registration application form.
Can I sell other goods or services in addition to HSN Codes mentioned in the application?
There is no limit to the number of goods you can supply or the number of services you can provide under a single registration.
The implementation of HSN/SAC codes in invoice line items under the GST regime will make this information readily accessible to relevant stakeholders.
Additionally, applicants no longer need to undergo additional registration processes to supply more than five goods and/or services.
What is the difference between HSN Code & SAC Code?
| S.No. | Categories | HSN (Harmonized System of Nomenclature) | SAC (Services Accounting Code) |
| 1. | Definitions | Comprehensive naming system for goods | Code system for categorizing services |
| 2. | Purpose | Facilitates determining GST rates for goods | In contrast, Facilitates determining GST rates for services |
| 3. | Authority | Issued by the World Customs Organization (WCO) | Issued by the Central Board of Excise and Customs (CBEC) |
| 4. | Code Length | Consists of an 8-digit code | Whereas SAC has only a 6-digit code |
You can see the complete list of SAC Codes here : List of SAC Code with Tax Rates
What if you forget to mention the HSN code while GST Return Filing?
It’s crucial to put the right HSN/SAC Code on your invoices while doing GST Return Filing through Form GSTR-1.
If you don’t, you might have to pay a penalty of INR 50,000 (INR 25,000 for both CGST and SGST). This is according to Section 125 of the Central Goods and Services Tax Act, 2017.
Conclusion
- In conclusion, HSN Codes are used to determine the GST Rates for Goods while SAC Codes are used for determining the GST Rates for services.
- You can add up to five HSN Code or five SAC Codes while submitting a GST Registration application. However, you can supply any number of goods and services and later mention HSN Codes and SAC Codes on GST Return Filing and invoicing.
- You can also amend the HSN Code or add HSN Codes through the GST Portal without the approval of Tax Officials.
- Lastly, HSN Codes are an important aspect of the GST Regime, and above all not mentioning them on invoicing or return filing will result in a huge penalty.
Moreover, If you want any other guidance relating to GST Registration Online, please feel free to talk to our business advisors at 8881-069-069.
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