Is HSN Wise Summary Mandatory For Filing GSTR 9?

Most of the business owners and Chartered Accountants are questioning – Do I really need to add HSN-wise summary? Is it mandatory? What if I don’t provide? Don’t worry, you are not alone here.

With annual returns asking for reconciliations, taxpayers are finding answers to whether HSN-wise summary details are optional or mandatory. If you too, have this question in mind, this blog is a must-read.

Is HSN Summary Mandatory in GSTR-9?

Yes. The HSN-wise summary of outward supplies in Table 17 of GSTR-9 is mandatory where applicable. From FY 2021-22 onwards:

• Taxpayers whose aggregate turnover in the preceding financial year exceeded ₹5 crore must report six-digit HSN codes.
• Taxpayers whose aggregate turnover in the preceding financial year was up to ₹5 crore must report four-digit HSN codes for B2B outward supplies.
• Table 17 may be skipped where nil liability is reported.
• For FY 2024-25, the HSN-wise summary of inward supplies in Table 18 is optional.

These requirements arise from the instructions to Form GSTR-9 and the current GST Portal filing workflow.

GSTR-9 HSN Summary: Turnover-Wise Reporting Rules at a Glance

Why is the HSN-wise Summary Important in GSTR 9?

1. Get Accurate Tax Computations: Every HSN code is connected with specific tax rates, ensuring precision in every GST computation.
2. Streamlined Tax Audits: HSN-wise summary ensures streamlined GSTR 9 process and minimizes errors during audits.
3. ITC Reconciliation: Ensure accuracy while claiming ITCs throughout the year with HSM summary details.

Tables 17 and 18: HSN Code Format for GSTR 9

1. Outward Supplies in Table 17

Table 17 of GSTR 9 maintains a clean record of the HSN-wise summary for outward supplies. It consists of HSN codes, descriptions, quantity, tax payable, and taxable amount.

2. Inward Supplies in Table 18

This is optional where businesses have to provide an HSN summary for inward supplies in table number 18. It comprises HSN codes, description, quantity, taxable amount, and taxes payable, but this time, it is completely based on turnover and choice.

Accuracy in tables 18 and 17 is important to comply with GST norms. Filling the tables appropriately ensures proper classification and reporting of all the entities, facilitating seamless GSTR 9 filing.

How Do I Upload HSN Details in Form 9 of GSTR?

1. Check the turnover to report HSN details.
2. Abide by the following rules:
   1. Leverage the 6-digit HSN code for turnover above Rs 5Cr.
   2. Use a 4-digit HSN code for turnover below Rs 5Cr reported for B2B supply.
3. Consolidate all the transactions.
4. Classify these transactions on the ERP to report them accurately.
5. Now, navigate to the official GST filing portal, go to GSTR 9 filing, and add details of the HSN summary in tables 17 and 18. Make sure all the entries are done accurately to avoid penalties.

What if You Fail to Add or Fill Incorrect HSN Details in GSTR 9?

1. Businesses might have to pay monetary penalties depending on the severity and frequency of discrepancies.
2. Errors in HSN entries can raise flags and encourage tax officials to conduct additional audits and examinations.
3. This may also lead to legal consequences and costly penalties arising due to repeated errors in HSN summary.
4. No compliance with HSN rules can damage business reputation, ruin relationships, and tarnish client trust in the long run.

5 Mistakes to Avoid While Adding HSN Summary During GSTR 9 Filing

1. Incorrect HSN entries can cause penalties. Double-check your HSN details before submitting the GSTR 9 form.
2. Overlooking HSN requirements is also a common mistake by small businesses. Keep a check on your turnover and provide HSN details accordingly.
3. HSN codes might change with GST laws, so failing to keep a check on these updated codes can cause non-compliance. So, verify the HSN codes before utilizing them.
4. Incomplete description of products and services can be confusing; make sure you avoid this negligence.
5. Misclassification of HSN entries is again a common mistake. Placing your goods and services under the wrong HSN code category can cause misunderstanding.

Frequently Asked Questions (FAQs)

1. Is the GSTR-9 HSN summary mandatory for all taxpayers?

Table 17 is mandatory where HSN reporting applies. However, it may be skipped where nil liability is reported. The number of HSN digits depends on the taxpayer’s aggregate turnover in the preceding financial year.

2. What is the turnover-wise HSN requirement in GSTR-9?

Taxpayers with preceding-year turnover above ₹5 crore must report six-digit HSN codes. Taxpayers with preceding-year turnover up to ₹5 crore must report four-digit HSN codes for B2B outward supplies.

3. Are the HSN requirements in GSTR-9 and GSTR-1 the same?

The turnover-based HSN digit requirements broadly align, but the reporting formats differ. GSTR-1 reports periodic outward supplies through Table 12, whereas GSTR-9 provides the annual consolidated HSN summary in Table 17.

4. Is Table 18 mandatory in GSTR-9?

No. Table 18, which contains the HSN-wise summary of inward supplies, is optional for FY 2024-25. Check the applicable form instructions before using the same position for a later financial year.

5. What happens if I report the wrong HSN code?

An incorrect HSN code may create inconsistencies with GSTR-1, invoices and accounting records. It may also require an explanation during scrutiny because GSTR-9 cannot be revised after filing. A penalty is not automatic and depends on the nature of the contravention.

6. Where can I find the correct HSN code?

Use the HSN search facility available through the GST system and verify the code against the product description, chapter notes and applicable GST rate. For uncertain classifications, obtain advice from a qualified GST professional.

About the author

Priyanka Chaudhari

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Priyanka Chaudhari is an enthusiastic writer with an ocean of experience in the tech world. She writes mainly on topics like accounting, e-invoicing, GST, and billing. Currently, she is working with Munim and comes up with innovative topics for the readers. Stay tuned to her blogs.