49 chemical products brought under 8-digit HSN classification

KR Srivats New Delhi | Updated on December 02, 2020

The Central Board of Indirect Taxes and Customs (CBIC) has mandated eight-digit HSN classification for 49 chemical-based products for mention at the time of issuing GST invoices.

This move is expected to avoid classification disputes and reduce tax leakages, say tax experts. Industry will now have to make changes in its Enterprise Resource Planning (ERP) platforms to move from current two/four-digit level, they added. HSN — the Harmonised Commodity Description and Coding System — is a multipurpose international product nomenclature developed by the World Customs Organisation.

Some of the products that are part of the 49 chemicals list include cyanogen chloride; hydrogen cyanide; phosphorous trichloride; trimethyl phosphite; sulfur dichloride and triethanolamine.

Pratik Jain, Tax Partner, PwC India told BusinessLine that the government may want to monitor the data to check tax leakages either by wrong classification or other means, based on specific intelligence.

Abhishek Jain, Tax Partner, EY said: “The CBIC has mandated eight-digit HSN classification for 49 chemical based products, to be mentioned at the time of issuing GST invoice, which was currently placed at two/four digits depending upon turnover. Pursuant to this notification, the industry players dealing in these goods will have to undertake HSN classification at eight-digit level for their products along with requisite ERP changes.”

Published on December 02, 2020

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