Business: Starting From 1 May 2023, new GST invoicing rules will apply for businesses with turnover above Rs. 100 crore. The new rules require businesses to disclose the Harmonized System of Nomenclature (HSN) codes of goods or services provided on their invoices. With this move, it is expected that there is more transparency and consistency in GST reporting and will improve the ease of doing business.
HSN codes are a globally recognized system for classifying goods and services. The system assigns a unique code to every product or service, so that it is easy to identify and classify them. With the introduction of HSN codes on GST invoices, businesses can now claim Input Tax Credit (ITC) hassle-free. The ITC is a necessary part in the GST system that allows businesses to claim a credit for the taxes paid on their purchases.
For businesses to comply with the new GST invoicing rules, they must update their billing and accounting systems to incorporate HSN codes. If not complied with the rules you may attract penalties and fines. Businesses are also encouraged to inform their staff on the new rules to ensure a smooth implementation. The introduction of HSN codes in GST invoices is expected to increase the transparency and accountability of the GST system and increase business convenience for large companies.
