The 42nd GST Council meeting under the Chairmanship of Union Finance and Corporate Affairs Minister Nirmala Sitharaman through video conferencing today.
The Finance Minister recommended the Revised Requirement of declaring Harmonized System Nomenclature (HSN) for goods and Service Accounting Code (SAC) for services in invoices and in FORM GSTR-1, which will come into effect from April 1, 2021.
GSTR-1 is a monthly return that summarises all sales (outward supplies) of a taxpayer.
Firstly, it is recommended that HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores.
Secondly, HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover up to Rs. 5 crores.
Lastly, the government has the power to notify 8 digit HSN on the notified class of supplies by all taxpayers.
This move of the government to classify it would easily identify the annual turnover of the taxpayers which will not only make the taxation system efficient but will make it effective also.
India’s move to GST comes through an online taxation system and along with HSN codes for differentiation of goods for taxation. It is all developed to bring about single taxation and ease of doing business. HSN codes will now be used in filing returns, on invoices, etc., rather than written descriptions.
