Can I add a new HSN code addition after GST registration?

When a business registers under the Goods and Services Tax (GST) in India, it’s required to declare its goods and services using HSN (Harmonized System of Nomenclature) codes for goods and SAC (Services Accounting Codes) for services. These codes are critical for tax compliance and classification under the GST system. But what if your business evolves or diversifies, and you start dealing in new products or services that weren’t listed during registration? Can you add a new HSN code after completing GST registration? The answer is yes.

Let’s break down how and why you can modify your HSN codes under GST.

What is an HSN Code?

The HSN code is an internationally accepted system for classifying goods in a structured manner. In India, it is used for GST purposes to identify goods and services accurately. Businesses must declare the HSN codes for their products during GST registration, which helps determine the applicable tax rates and ensures correct reporting on invoices and tax filings.

Why Would You Need to Add or Update HSN Codes?

There are several reasons why a business might need to add or modify HSN codes after its initial GST registration:

1. Business Expansion: If your business expands and starts trading new products or services not originally listed, you’ll need to update the HSN codes accordingly.
2. Changes in Business Structure: Mergers, acquisitions, or changes in your supply chain could lead to new goods or services being added to your portfolio.
3. Tax Rate Adjustments: The government may introduce changes in tax rates or modify the HSN structure over time, requiring businesses to update their codes to reflect the current regulations.
4. Correction of Errors: Sometimes businesses may inadvertently provide incorrect HSN codes during GST registration. Such errors need to be corrected.

How to Add or Update HSN Codes Post GST Registration?

Updating HSN codes after GST registration is a relatively straightforward process. Here’s how it can be done:

1. Access the GST Portal

Log in to the GST portal using your credentials. Once logged in, navigate to the “Amendment of Registration” option under the “Services” tab.

2. Choose the Relevant Section

To add a new HSN code, select the section that pertains to the business activity and nature of the goods and services being supplied. This section contains your core business details, including HSN and SAC codes.

3. Amend the HSN Details

Add the new HSN code(s) for the products or services your business will now be dealing with. You can also remove or modify any existing codes if needed.

4. Submit the Changes

After making the necessary updates, review your entries carefully and submit the amendment request. The GST authorities may process the changes automatically, but in some cases, a review might be require. Once approved, the changes will reflect in your GST registration.

5. Amended Registration Certificate

After approval, you will receive an update GST registration certificate that includes the new HSN codes.

Important Considerations

• Invoice Compliance: Once the new HSN code is add, make sure that all invoices, GST returns, and documentation reflect the updated codes.
• Threshold-Based HSN Declaration: The requirement to declare HSN codes on invoices depends on the annual turnover of the business. For example, businesses with a turnover of up to ₹5 crores must mention HSN codes for goods and services on invoices, with two digits for up to ₹5 crores and four digits for those exceeding ₹5 crores.
• Avoid Delay: It is crucial to update HSN codes promptly when introducing new products or services to ensure accurate tax computation and avoid penalties for misclassification.

Conclusion

Adding a new HSN code after GST registration is not only possible but also essential for businesses that expand or modify their product offerings. The GST portal allows for seamless updates, ensuring your business remains compliant with tax regulations. By keeping your HSN codes updated, you can avoid potential legal issues, ensure correct tax rates, and maintain proper records for invoicing and GST returns.

Always remember to consult with a GST professional or tax advisor to ensure all changes are accurately reflect and in compliance with the latest tax laws.