HSN Code Related Changes Effective from 1 February 2024
Stay informed about the latest changes in the HSN Code requirement. In accordance with notification No. 78/2020 –Central Tax, dated 15th October, 2020, taxpayers are now required to include at least a 6-digit HSN code for B2B and Export transactions if their Annual Aggregate Turnover (AATO) exceeds Rs. 5 Crores. For those with an AATO below Rs. 5 Crores, a minimum of a 4-digit code is mandatory. This crucial update is set to be implemented in the e-way bill system starting from February 1, 2024.
Details of the Advisory:
As part of the evolving tax regulations, the government has mandated a significant adjustment in the HSN code requirements for e-way bills. This shift is aimed at streamlining the tracking and documentation of business-to-business (B2B) and export transactions, ensuring transparency and accuracy in the reporting process.
Key Points to Note:
Mandatory HSN Code Length
(i) Taxpayers with an AATO exceeding Rs. 5 Crores must provide a minimum 6-digit code.
(ii) Taxpayers with an AATO below Rs. 5 Crores are required to include a minimum 4-digit code.
Implementation Date
The new HSN code validation will be enforced in the e-way bill system from February 1, 2024.
Action Required
Taxpayers are advised to promptly update their systems to accommodate the new HSN code requirements.
Starting February 1, 2024, ensure that 4 or 6-digit HSN codes (as applicable) are entered while generating e-way bills through web and API systems.
Conclusion:
This advisory serves as a proactive measure to equip taxpayers with the necessary information to comply with the updated regulations on HSN code inclusion in the E-Way Bill System. Adhering to these changes ensures a smooth and error-free process for generating e-way bills and contributes to an efficient and transparent business environment.
Stay ahead of the curve by incorporating the required adjustments into your systems well in advance of the February 1, 2024 deadline. For any clarifications or further assistance, taxpayers are encouraged to reach out to the relevant authorities.
In summary, this update emphasizes the importance of aligning with the latest regulatory requirements to facilitate a seamless and compliant E-Way Bill System.
To Download the Advisory CLICK HERE
To Access the CBIC Notification No. 4/2024 Dated 5th January 2024 CLICK HERE
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