Implementation of Mandatory Mentioning of HSN Codes in GSTR-1 & GSTR-1A
Jan 9th, 2025
Overview
The GST Network (GSTN) has announced the implementation of Phase-III of the mandatory mentioning of HSN (Harmonized System of Nomenclature) codes in Table 12 of GSTR-1 and GSTR-1A, effective from the return period of January 2025. This article provides a detailed breakdown of the changes introduced in this phase.
Key Highlights of Phase-III Implementation
1. Dropdown for HSN Codes
Manual entry of HSN codes has been replaced with a dropdown menu.
Taxpayers are now required to select the correct HSN code from the provided dropdown options, ensuring accuracy and consistency.
2. Bifurcation of Table 12
Table 12 has been divided into two distinct tabs:
B2B (Business-to-Business): For reporting supplies made to registered persons.
B2C (Business-to-Consumer): For reporting supplies made to unregistered persons.
This bifurcation helps in the clear segregation and reporting of supplies.
3. Validation of Values and Tax Amounts
Validation checks have been introduced for:
Supply values
Tax amounts
These validations ensure that the data reported is accurate and consistent for both tabs of Table 12.
4. Warning Mode for Initial Period
During the initial implementation phase, validations will operate in warning mode only.
Failing these validations will generate warnings but will not block the filing of GSTR-1 and GSTR-1A.
This allows taxpayers time to adapt to the new system without disruptions.
Benefits of the Changes
Improved Accuracy: The dropdown for HSN codes minimizes errors caused by manual data entry.
Better Reporting: Separate tabs for B2B and B2C supplies provide clearer and more structured data.
Streamlined Compliance: Automated validations ensure compliance with GST rules while allowing a grace period for adjustments.
Detailed Advisory
For a comprehensive understanding of these changes, taxpayers are encouraged to refer to the detailed advisory available on the GST portal.
Conclusion The implementation of Phase-III for HSN codes in GSTR-1 and GSTR-1A marks a significant step towards enhancing accuracy and compliance in GST reporting. Taxpayers are advised to familiarize themselves with the new features and utilize the initial warning mode period to adapt seamlessly.
