An incorrect HSN code is more than a typo — it can change the tax you owe. Here's what's at stake and how to put it right.
The HSN code on an invoice determines the GST rate. Pick the wrong code and you may charge too little (creating a liability) or too much (overcharging customers). Either way, repeated errors flag your account for scrutiny.
Under Section 125 of the CGST Act, a general penalty of up to ₹25,000 can apply for incorrect HSN reporting. More importantly, if a wrong code led to short payment of tax, you also owe the differential tax plus interest at 18% per annum.
One lookup per SKU prevents almost all HSN problems. Build your catalogue with verified codes from the start, and if you're unsure about a tricky product, talk to our team during a free consultation.
Our in-house CA & CS team set up your virtual office, VPOB and GST end to end — from ₹15,290/yr.
💬 Talk to our team View plans →A general penalty can technically apply, but the priority is correcting future invoices and the HSN summary. Tax and interest only arise if the rate was wrong.
Use the amendment tables in GSTR-1 and issue credit/debit notes where the tax amount changed.
Verify each product once with the free HSN Code Finder and store the code in your product master for consistent reuse.
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