Recent advisory on HSN vis-à-vis filing of GSTR-1

It is reported that recently the taxpayers are facing various issues in filing Form GSTR-1 concerning the

HSN code. Accordingly, an advisory was issued on the same which is taken up and explained in the present article.

Provisions relating to HSN effective from 1st April 2021-

Harmonized System of Nomenclature (i.e., HSN) is, basically, a worldwide accepted six-digit uniform code that is defined for various products. Under Goods and Services Tax, based on the turnover of the registrant, it is mandatory to mention the specific digits of HSN on the tax invoice. As per notification no. 78/2020- Central Tax dated 15

th October 2020, the mandatory mentioning of the digits on the tax invoice, as effective from 1st April 2021, is tabulated hereunder-

Aggregate turnover of the registrant in the preceding Financial Year	Number of HSN digits to be mentioned in a tax invoice
Up to INR 5 Crores	4 digits
Above INR 5 Crores	6 digits

Accordingly, the registrant is required to report the same, HSN along with description, while filing the return in Form GSTR-1.

HSN related issues reported while filing return in Form GSTR-1-

However, recently, the taxpayers are facing several issues with regard to reporting of HSN in Form GSTR-1. The problems are featured hereunder-

HSN, as used by them for reporting, is not available in Table 12 ‘HSN drop-down list’ in Form GSTR-1.
Problems are being faced in adding the HSN details under Table 12 vis-à-vis the filing of the statement of outward supplies in Form GSTR-1.
In some JSON files, the HSN is reflected as blank from the offline tools. Notably, HSN gets blank along with some of the errors like-
1. Processed with Error,
2. In progress/ received but pending,
3. Duplicate Invoice Number found in the payload, please correct.

Advisory issued in the matter-

With regard to the various problems being faced, an advisory was issued on 24

th August 2021. The advisory stated as under-

It is mandatory to mention the ‘Description’ against the HSN code stated in Table 12 of Form GSTR-1. Without entering the same, the taxpayer will face rejection at the time of filing of Form GSTR-1.
Presently, the validation of Form GSTR-1 is relaxed. Accordingly, if the taxpayer doesn’t find the valid HSN code from the drop-down list, then, they can enter/ add the HSN and the corresponding description.
Importantly, the above-mentioned relaxation is available only while filing Form GSTR-1. The same is not relaxed on the Invoice Registration Portal (i.e. IRP) and E-way bill portal.

Ways to deal with various reported errors are summarized in paras below.

Dealing with various errors while uploading return in Form GSTR-1-

Recently, it is reported that the taxpayers are facing various errors while uploading return in Form GSTR-1. The errors and corresponding resolution are explained in the below table-

Errors messages	Preferable resolution
Processed with error/ In progress/ Received but pending	For filing the return, the taxpayers are advised/ directed- · To appropriately fill in Table 12 of Form GSTR-1; and · To download the latest version of Offline Tool i.e. version 3.0.4 available on the GST portal.
Duplicate Invoice Number found in payload please correct	As and when the taxpayer uses the same record number/ invoice number in the same Financial Year, the system treats such as duplicate records and rejects the same. Accordingly, the taxpayers are advised to provide a unique number for an invoice or credit note or debit note.
HSN of any goods/ services is valid but not accepted on the GST portal or e-invoice portal or e-way bill portal	Raise a ticket on GST Self Service Portal in the following manner- · Visit site GST Self Service, · Click ‘Report Issue’, · Mention ‘HSN’ under the ‘Type of Issue/ Concern’ search box and select the appropriate sub-category provided in the list.

Latest Updates

Attention GST Taxpayers! Starting January 2025, it will be mandatory to report HSN (Harmonized System of Nomenclature) codes in Table 12 of GSTR-1/1A based on your Aggregate Annual Turnover (AATO):

AATO up to ₹5 Crore: Report 4-digit HSN codes.
AATO above ₹5 Crore: Report 6-digit HSN codes.

Key Updates in Phase 3:

No Manual Entry: Select HSN codes from a dropdown list only.
Auto-Populated Descriptions: Descriptions will automatically be filled based on selected HSN codes.
Table-12 Enhancements: Split into B2B and B2C tabs for accurate reporting.
Validation Checks: Ensure values in B2B and B2C supplies match those in Table-12. Initial warnings will allow filings despite discrepancies.

Additional Features:

Download HSN Codes List: Easily access updated HSN & SAC codes.
Searchable Product Names: Auto-fill HSN details from your HSN Master.

Ensure your systems are updated and familiarize yourself with these changes to maintain compliance. For seamless filing and expert assistance, Connect with IndiaFilings today!

Back to Learn

Frequently Asked Questions

Common questions about HSN Code Advisory for GSTR.

HSN codes are standardized numerical codes used worldwide to classify products and services. Mentioning these codes on tax invoices ensures uniformity in product identification, which is essential for GST compliance and proper tax calculation.

The number of digits of the HSN code to be mentioned on a tax invoice depends on the aggregate turnover of the taxpayer in the preceding financial year. If the turnover is up to INR 5 crores, 4 digits of the HSN code need to be mentioned. For turnover above INR 5 crores, 6 digits of the HSN code are required.

Taxpayers are facing issues like the HSN code not being available in the dropdown list in Table 12 of GSTR-1, problems in adding HSN details in Table 12, and HSN getting reported as blank in some JSON files from offline tools.

The advisory states that it is mandatory to mention the 'Description' against the HSN code stated in Table 12 of GSTR-1. Without entering the description, the taxpayer will face rejection while filing GSTR-1.

Currently, the validation of GSTR-1 is relaxed. If the taxpayer doesn't find the valid HSN code from the dropdown list, they can enter/add the HSN and the corresponding description. However, this relaxation is available only while filing GSTR-1 and not on the Invoice Registration Portal (IRP) and e-way bill portal.

When the taxpayer uses the same record number or invoice number in the same financial year, the system treats it as a duplicate record and rejects it. To resolve this, taxpayers are advised to provide a unique number for each invoice, credit note, or debit note.

In such cases, taxpayers are advised to raise a ticket on the GST Self Service Portal by visiting https://selfservice.gstsystem.in/, clicking 'Report Issue', mentioning 'HSN' under the 'Type of Issue/Concern' search box, and selecting the appropriate sub-category provided in the list.

Starting January 2025, it will be mandatory to report HSN codes in Table 12 of GSTR-1/1A based on the aggregate annual turnover (AATO). Taxpayers with AATO up to ₹5 crore will need to report 4-digit HSN codes, while those with AATO above ₹5 crore will need to report 6-digit HSN codes.

The key enhancements include no manual entry (HSN codes to be selected from a dropdown list only), auto-populated descriptions based on selected HSN codes, split of Table 12 into B2B and B2C tabs for accurate reporting, validation checks to ensure values in B2B and B2C supplies match Table 12, and additional features like downloadable HSN codes list and searchable product names.

To ensure seamless HSN code reporting and maintain compliance, taxpayers should update their systems as per the latest guidelines, familiarize themselves with the changes, and seek expert assistance if needed. Connecting with reliable service providers like IndiaFilings can help with efficient filing and expert guidance.