Used the wrong HSN or SAC code? Understand when it is only a procedural error, when it changes tax, the penalty under section 125, and step-by-step correction through credit notes and GSTR-1 amendments.
If the wrong HSN code did not change the tax rate, it is mainly a procedural lapse: correct it going forward and amend the GSTR-1 HSN summary. If it led to a lower rate, you owe the differential tax with interest, and penalties may apply. A general penalty under section 125 of the CGST Act applies to contraventions without a specific penalty.
| Situation | Tax impact | What to do |
|---|---|---|
| Wrong code, same rate | None on tax amount | Fix item master; amend HSN summary in a later GSTR-1 |
| Wrong code, lower rate charged | Short payment of tax | Pay difference with interest via DRC-03; issue debit note / supplementary invoice |
| Wrong code, higher rate charged | Excess tax collected | Issue credit note within time limits, or seek refund subject to unjust-enrichment rules |
| Code not in GST master | E-invoice/e-way bill rejected | Correct before generating the document |
Credit notes for excess GST must be declared by 30 November following the end of the financial year (or before annual return filing, if earlier).
Repeated mismatches between e-way bills, e-invoices and GSTR-1 are a common reason for scrutiny notices. If you already received a notice about classification, reply with documents rather than a one-line explanation.
Senior contributor at Taxpex Consultancy. Reviewed by a practising Chartered Accountant. Published on 16 October 2026 · Updated on 16 October 2026.
IT and GST notice drafting and representation by senior CAs.
Get your GSTIN issued in 3–7 working days — pan-India, fully online, with Aadhaar e-KYC support.
Monthly and annual GST returns — GSTR-1, GSTR-3B, GSTR-9 — filed accurately with full ITC reconciliation.
Modern accounting for smart businesses — organised books, MIS reports and clarity on every financial decision.
GST — done for you by Taxpex
Prefer a CA to handle this end to end? GST Registration is our dedicated, fixed-fee service — this guide explains the process, that page gets it filed.
Go to GST RegistrationIT and GST notice drafting and representation by senior CAs.
How many HSN digits must you print on a GST invoice? 4 digits up to ₹5 crore turnover, 6 digits above ₹5 crore, 8 digits for imports/exports — with examples, B2C rules and common mistakes.
16 October 2026 · 12 minA practical method to find the right HSN code: start with the chapter, read section and chapter notes, apply the General Rules of Interpretation and verify the GST rate. With worked examples.
16 October 2026 · 11 minSAC codes explained: the 99 prefix, major service groups (construction, transport, restaurants, professional, IT, rental, financial) with examples, and how to choose the right 6-digit SAC for your invoice.
No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.
via EMI CalculatorNo. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.
via Personal Loan CalculatorNo. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.
via Home Loan CalculatorNo. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.
via Car Loan Calculator