Update on HSN Code Reporting in GSTR-1 and GSTR-1A: Advisory Dated January 22, 2025
In a significant update for taxpayers, the GST portal has issued a revised advisory on the mandatory mentioning of HSN (Harmonized System of Nomenclature) codes in GSTR-1 and GSTR-1A. Initially announced on January 9, 2025, for implementation in the January 2025 tax period, this advisory has now been updated. According to the new advisory, the implementation will begin from the February 2025 tax period.
Key Highlights of the New Advisory
Phase-III of HSN Code Implementation:
Following the successful rollouts of Phase-I and Phase-II, Phase-III introduces key changes for Table 12 of GSTR-1 and GSTR-1A. These updates are designed to improve the accuracy and efficiency of HSN code reporting in GST returns.
Mandatory Selection of HSN from Drop-Down Menu:
The manual entry of HSN codes has been replaced by a drop-down menu. Taxpayers are now required to select the correct HSN code from the list, ensuring standardized and error-free reporting.
Bifurcation of Table-12 into Two Tabs:
Table-12 of GSTR-1 and GSTR-1A has been divided into two distinct sections:
- B2B (Business-to-Business) Supplies
- B2C (Business-to-Consumer) Supplies
This bifurcation simplifies the reporting process by separately categorizing B2B and B2C supplies.
Validation Mechanism Introduced:
A validation mechanism has been added for the values of supplies and tax amounts reported in Table-12. During the initial phase, the validation checks will operate in “warning mode” only. This means that even if the values fail validation, it will not block the filing of GSTR-1 and GSTR-1A, giving taxpayers some flexibility.
Comparison of Old and New Advisory
| Aspect | Old Advisory (9 Jan 2025) | New Advisory (22 Jan 2025) |
|---|---|---|
| Implementation Date | January 2025 tax period | February 2025 tax period |
| Manual HSN Entry | Replaced by drop-down menu selection | Replaced by drop-down menu selection |
| Table-12 Bifurcation | Divided into B2B and B2C tabs | Divided into B2B and B2C tabs |
| Validation Mechanism | Introduced in warning mode | Introduced in warning mode |
GSTN Advisory Implementation (January 22, 2025)
Following the successful implementation of Phase-I and Phase-II, Phase-III will be rolled out for Table 12 of GSTR-1 and GSTR-1A starting from the February 2025 return period. In this phase, manual entry of HSN codes will be replaced with a selection from a drop-down menu. Additionally, Table-12 will be divided into B2B and B2C tabs to report supplies separately. A validation mechanism for the supplies and tax amounts in both tabs will be implemented, but for the initial period, these validations will operate in warning mode only. Failing validation will not block the filing of GSTR-1 and GSTR-1A.
For a detailed advisory, please click here.
Thank you,
Team GSTN
