HSN wise reporting change in GSTR 1 from Jan 2025

Summary

In this video, the speaker discusses important updates to the GSTR-1, focusing on changes to the HSN-wise reporting in Table 12, effective from January 2025. Key changes include mandatory 4-digit HSN codes for businesses with turnover up to ₹1 crore and 6-digit codes for those with turnover above ₹1 crore. Phase 3 will eliminate manual entry and introduce automated product descriptions. The report is divided into B2B and B2C categories, with validation checks initially showing warnings, which will later become mandatory. The video aims to keep users informed about these updates and their implications on GST filings.

Takeaways

• 😀 Phase 3 of GSTR-1 Table 12 changes will begin in January 2025, focusing on HSN-wise reporting.
• 😀 Businesses with turnover up to ₹1 crore must report a 4-digit HSN code, while those above ₹1 crore need to report a 6-digit HSN code.
• 😀 Manual HSN code entries will no longer be allowed, and the system will automatically generate the goods description after entering the HSN code.
• 😀 Validation checks for both B2B and B2C supplies will be introduced in GSTR-1 Table 12, with these checks initially being in warning mode.
• 😀 Eventually, these validation checks will become mandatory for accurate reporting in GSTR-1 Table 12.
• 😀 B2B supply entries in Table 12 must match related entries in other GSTR-1 tables, such as Tables 4, 6, and 8.
• 😀 B2C supply reporting in Table 12 will need to align with entries in Tables 7 and 8.
• 😀 Amendments made to reports must include any differential values (positive or negative) in Table 12.
• 😀 Reporting for B2B supplies is mandatory for businesses with turnover up to ₹1 crore, while B2C reporting remains optional for these businesses.
• 😀 For businesses above ₹1 crore turnover, both B2B and B2C reporting will have strict validation checks in place in the future.
• 😀 These changes are part of the broader effort to enhance accuracy and streamline reporting processes on the GST portal.

Q & A

What is the major change introduced in GSTR-1 Table 12 from January 2025?

The major change is the implementation of automated HSN reporting in GSTR-1 Table 12. Businesses will no longer manually enter HSN codes. Instead, they will enter an HSN number, and the corresponding product description will automatically populate.

How will HSN-wise reporting in Table 12 be divided starting from January 2025?

HSN-wise reporting in Table 12 will be divided into two parts: one for B2B (Business to Business) supplies and another for B2C (Business to Consumer) supplies.

What are the validation checks that will be implemented in GSTR-1 Table 12?

Validation checks will ensure that B2B supplies reported in Table 12 match the corresponding supplies in other GSTR-1 tables (such as Table 4, 6, 8). Similarly, B2C supplies reported in Table 12 must match Table 7 or Table 8. Differential values due to amendments will also need to be reflected correctly.

What happens if a business has a turnover below ₹5 crore regarding HSN code requirements?

If the business turnover is below ₹5 crore, it is mandatory to report a 4-digit HSN code for B2B supplies, while B2C reporting remains optional.

What happens for businesses with a turnover above ₹5 crore in relation to HSN reporting?

For businesses with a turnover above ₹5 crore, a 6-digit HSN code must be provided for B2B supplies in GSTR-1 Table 12.

What are the two types of reporting required in GSTR-1 Table 12, and which is mandatory?

The two types of reporting in Table 12 are B2B and B2C supplies. Reporting B2B supplies is mandatory, while reporting B2C supplies is optional for businesses with turnover below ₹5 crore.

Will the validation checks in GSTR-1 Table 12 be immediate or gradual?

Initially, the validation checks will be in warning mode, meaning businesses will receive alerts but will still be able to file GSTR-1. Over time, these checks will become mandatory, and businesses will need to comply before submitting their returns.

What happens if a business reports B2B supplies in other tables of GSTR-1?

If a business reports B2B supplies in any other table of GSTR-1 (like Table 8), those B2B supplies must also be reported in Table 12 and cannot be left blank.

How will amendment entries be handled in GSTR-1 Table 12?

In case of amendments, any differential values must be reported in Table 12. If the differential value is positive, it must reflect as positive in Table 12, and if negative, it must be reported as negative.

What impact will these changes have on businesses with turnover below ₹5 crore?

For businesses with turnover below ₹5 crore, B2B HSN reporting will still be mandatory, but B2C reporting will remain optional. Validation checks for B2C supplies will not apply, and businesses can file without providing these details.