Is HSN Wise Summary Mandatory in GSTR-9? Know How to Upload It?

Many taxpayers are unsure whether HSN-wise summary in GSTR-9 is mandatory and how to report it correctly in Tables 17 and 18. From FY 2021-22, HSN summary for outward supplies is compulsory in GSTR-9, with digit-level requirements linked to turnover, making correct HSN reporting critical for accurate annual GST compliance. This article clearly decodes HSN reporting in GSTR-9 in a step-by-step format to ease your annual return filing.

Key Takeaways:

• HSN-wise summary for outward supplies in Table 17 of GSTR-9 is mandatory from FY 2021-22 onwards, subject to specified turnover conditions.
• Taxpayers with turnover above Rs 5 crore must report HSN codes at 6 digits; those up to Rs 5 crore must report at least 4-digit HSN for B2B supplies in Table 17.
• Table 18 (HSN-wise inward supplies) continues to be optional, but providing a summary helps align annual figures with ITC and purchase data.
• HSN summary in GSTR-9 should be consistent with HSN reported in GSTR-1/Table 12, GST registration and financial records to avoid mismatches and scrutiny.

Is HSN-Wise Summary Mandatory in GSTR-9?

Yes, HSN code is mandatory in GSTR 9 under certain conditions. From the financial year 2021-22 onwards, it's mandatory to report the HSN Summary for Outward Supplies (your sales) in Table 17 of GSTR-9.

• Taxpayers with a turnover above Rs.5 crores must report HSN codes at a 6-digit level.
• For those with a turnover up to Rs.5 crores, reporting is at a 4-digit level for B2B supplies.

Importance of HSN-Wise Summary in GSTR-9 Filing

• Ensuring Accurate Tax Calculation: Each HSN code links to specific tax rates, facilitating precise GST calculations.
• Streamlining Compliance and Audits: Accurate HSN coding eases return processing and reduces discrepancies during audits.
• Facilitating Input Tax Credit (ITC) Reconciliation: The summary aids businesses in reconciling ITC, ensuring correct claims throughout the year.

Penalties for Incorrect or Missing HSN-Wise Summary

• Monetary Fines: Businesses may face varying financial penalties imposed by tax authorities for incorrect HSN summaries, with the severity and frequency of errors influencing the amount.
• Increased Scrutiny from Tax Authorities: Mistakes in HSN coding can raise flags, prompting tax authorities to closely examine your filings, potentially leading to additional audits and inspections.
• Legal Consequences: Significant non-compliance or repeated offences may subject businesses to legal action, including time-consuming and costly litigation.
• Damage to Reputation: Compliance issues, especially related to taxes, can tarnish a business's reputation, influencing relationships and customer trust in the long term

HSN-Wise Summary Format in GSTR-9 (Tables 17 and 18)

• Clear Reporting in Table 17 (Outward Supplies):

Table 17 of GSTR-9 demands a detailed HSN-wise summary for outward supplies. It must include HSN codes, descriptions, quantities, taxable values, and tax amounts for accurate reporting.

• Optional Table 18 (Inward Supplies):

In Table 18, businesses can provide an optional HSN-wise summary for inward supplies. It must include details similar to Table 17, but this section depends on turnover and choice.

• Accurate Filling Ensures Compliance:

Filling these tables accurately is crucial for GST compliance, ensuring proper classification and reporting of goods and services, and contributing to a comprehensive GSTR-9 filing.

How to Upload HSN Summary in GSTR 9?

• Assess annual turnover for HSN reporting requirements.
• HSN Code Rules:
  • Use 6-digit codes for turnover above Rs. 5 crores.
  • For up to Rs. 5 crores, report B2B with 4 or 6-digit codes.
• Compile a list of all transactions.
• Classify transactions on ERP for accurate reporting.
• Log in to www.gst.gov.in, navigate to GSTR-9, fill in Tables 17 and 18, review, and submit accurately to avoid penalties. 

Common Mistakes to Avoid in the HSN Summary in GSTR 9 Filing

Avoiding common mistakes in the HSN summary of your GSTR-9 filing is crucial for maintaining compliance and ensuring accurate tax reporting. Being mindful of certain errors is important, as there are several key mistakes one should reflect on thoughtfully.

Incorrect HSN Codes

One of the most common mistakes is using the wrong HSN codes, especially when some goods/services undergo GST rate change /exemption, etc. This can lead to incorrect tax calculations. Always double-check the HSN codes against a reliable source or the official GST portal.

Overlooking the Requirement Based on Turnover

Small businesses, especially those with turnover below certain thresholds, might overlook the requirement of HSN reporting. Remember, the requirement to provide HSN summary varies based on your annual turnover.

Failing to Update HSN Codes

HSN codes can change due to updates in GST laws. It is imperative that one verifies utilisation of the presently accessible most updated codifications.

Incomplete or Inaccurate Description

Along with the HSN code, providing a complete and accurate description of goods or services is necessary. Vague or incorrect descriptions can lead to confusion and potential compliance issues.

Misclassifying Goods or Services

Placing an item under the wrong HSN code category is a frequent error. Misunderstandings regarding the inherent qualities of the product or service offered potentially contribute to such outcomes.

Not Including All Relevant Transactions

Ensure that all transactions for the financial year, including exempted, nil-rated, and non-GST supplies, are included if applicable to your business.

Ignoring the 4-Digit or 6-Digit Requirement

Depending on your turnover, you might need to use 4-digit or 6-digit HSN codes. Ignoring this detail can result in filing errors.

Errors in Data Entry

Simple data entry errors like incorrect quantities or values can significantly impact your tax liability and ITC claims. Always cross-verify the entered data with your financial records.

Skipping Monthly Check

Match your annual HSN summary with monthly or quarterly filings (GSTR-1, GSTR-3B) to avoid errors and possible penalties.

Not Seeking Expert Advice

If you're unsure about HSN reporting, it’s better to seek advice from a GST expert or use reliable GST software for accuracy.

Filing the HSN summary is required by law for businesses above a certain sales threshold. Carefully following the reporting rules and filling out Tables 17 and 18 properly ensures your taxes are calculated correctly and you comply with the tax regulations.

By avoiding common mistakes and being well-informed about the requirements, you can fill you GSTR-9 with proper HSN summaries, avoid penalties, and maintain good standing with the tax authorities.

Also Read:
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Common Errors and Solutions in GSTR-9