Tax Concept’s Representation to Hon’ble Finance Minister and GST Council Seeking Clarification on Reporting of HSN Codes in Tax Invoices as well as in GSTR-1 w.e.f. 1st April 2021

Tax Concept's Representation to Hon'ble Finance Minister and GST Council Seeking Clarification on Reporting of HSN Codes in Tax Invoices as well as in GSTR-1 w.e.f. 1st April 2021

Ref.: TC/GST/20-21/4                                                                         

Date: 13-04-2021

To,

Smt. Nirmala Sitharaman

Hon’ble Union Minister of Finance, Govt. of India &

Chairperson – GST Council

134, North Block, New Delhi – 110 001

The Office of GST Council Secretariat,

5th Floor, Tower II, Jeevan Bharat Building, Janpath Road,

Connaught Place, New Delhi – 110 001

Contact.gstcouncil@gov.in

Sub.: Seeking clarification on reporting of HSN codes in tax invoices as well as in GSTR-1 w.e.f. 1st April, 2021.

Respected Madam/ Sir,

Tax Concept is a well known platform formed for the professionals. The platform has over 500 members across India (such as CAs, CSs, CMAs and tax practitioners.)

Representation Started…

Vide Notification No. 78/2020- Central Tax and 79/2020- Central Tax Dated 15th October, 2020, some changes were made in the reporting of HSN codes in tax invoices as well as in GSTR-1.

In the Notification No. 78/2020- Central Tax, it is specifically mentioned that “in the case where aggregate turnover is up-to rupees 5 crores in the preceding financial year, then reporting of HSN codes shall be optional in case of B2C supplies”.

But two clarifications provided by the Goods and Services Tax Network (GSTN) are creating confusion between reporting requirement on electronic portal and the legal validity of the requirement. Clarifications provided by the GSTN and confusions created after these clarifications are mentioned as under:

(1.) GSTN has tweeted the below picture on its official twitter handle:

In the said picture, GSTN is saying about optional reporting of HSN code for all B2C supplies in the case where aggregate turnover is up-to rupees 5 crores in the preceding financial year.

But at the same time, GSTN is asking about reporting of minimum 4 digits in the case as mentioned above.

(2.) On 12th April, 2021, GSTN has issued a clarification on the GST portal about reporting of HSN codes. In the clarification, GSTN has provided the table as notified vide Notification No. 78/2020- Central Tax, but has not mentioned about the optional reporting of HSN Code.

When we refer relevant notifications, we can consider that above clarifications are not as per law. So, you are requested to please ask the GSTN to make necessary changes in the reporting of HSN Codes in GSTR-1 and not to issue any clarification which is not as per law.

Thanking You

Yours Faithfully,

Team Tax Concept

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