Mandatory reporting of HSN Code in Form GSTR-1/1A

Harmonised System of Nomenclature Code, simply known as HSN code, provide the classification of goods or services to identify the nature of the goods or services or both provided by registered person. Notification No. 78/2020 Central Tax, Dated 15th October 2020 effective from 01st April 2021, made it mandatory to report four- or six-digit HSN code in Table 12 of Form GSTR-1 and Form GSTR-1A accordingly based on the aggregate annual turnover (AATO) of preceding financial year.

To Facilitate the taxpayers to mandatory reporting of HSN code, GSTN timely implemented changes on GST portal in a phase wise manner. As per the recent GSTN advisory dated 22nd January 2025, phase-III will be implemented from return period of February 2025 to ensure mandatory reporting of HSN code in Form GSTR-1/1A.

Gist of the Advisory

1. Phase-wise implementation: Mandatory mentioning of HSN in Form GSTR-1/1A is implemented in a phase wise manner, phase -I was implemented in April 2022 and August 2022 respectively, phase-II was implemented from November-2022. Phase-III shall be ?implemented from return period of February-2025.
2. Mandatory Reporting: It is mandatory for taxpayer having turnover up to Rs. 5 Crore to report 4-digit HSN code in Table 12 of Form GSTR-1/1A and taxpayer turnover more than Rs. 5 Crore shall report 6- digit HSN code in his return.
3. Restriction of Manual Entry: In phase -III of implementation manual entry of HSN code will not allowed in table 12 of Form GSTR-1/1A. HSN Code can be selected from the drop-down list only available on portal. Warning message or alert will be shown in case of validation errors.
4. Bifurcation of HSN code: Table 12 of Form GSTR-1/1A will be available in two parts, “B2B Supplies” and B2C Supplies”. Taxpayers need to enter HSN code in respective tab. Table 12 can not be left blank in case of supply reported in respective or other tables.
5. Conclusion: Initially, any error in validation of return kept in warning mode and will not restrict to file GSTR-1/1A of respective month. Albeit taxpayers needs to be vigilant to report correct HSN code while furnishing his return. Phase-IV of HSN code will be implemented in due course.