GST Alert: Reduced B2C Invoice Reporting Threshold in GSTR-1!

A crucial amendment has been introduced to the Goods and Services Tax (GST) framework, impacting Business-to-Consumer supplies. GSTN issued an advisory on 03^rd September 2024 announcing a new limit for invoice-wise reporting of B2C transactions. The reduced invoice reporting threshold in GSTR-1 for B2C transactions necessitates prompt attention from taxpayers. This blog provides an overview of the changes, helping you navigate the revised requirements and maintain compliance.

Advisory dated 03^rd September 2024

Advisory on Reporting of supplies to un-registered dealers in GSTR1/GSTR 5

Sep 3rd, 2024

Vide Notification No. 12/2024 – Central Tax dated 10th July 2024, the Government has reduced the threshold limit for reporting invoice-wise details of inter-state taxable outward supplies made to unregistered dealers from 2.5 Lakh to 1 Lakh which needs to be reported in Table 5 of Form GSTR-1 and Table 6 of GSTR-5. Following the new legal provisions, this change is currently under development on the portal and will be available to the taxpayers shortly.

Further, till the time the functionality is made available on the portal, it is advised to continue reporting the invoice-wise details of taxable outward supplies to unregistered dealers which are more than 2.5 Lakhs in Table 5 of Form GSTR-1 and Table 6 of GSTR-5.

Thanks,
Team GSTN

Extract of Notification No. 12/2024 – Central Tax dated 10th July, 2024

In Rule 59(4) of the CGST Rules, 2017, with effect from the 1st day of August 2024, for the words "two and a half lakh rupees" wherever they occur, the words "one lakh rupees" shall be substituted. New sub-rule (4) is read as follows:

“(4) The details of outward supplies of goods or services or both furnished in FORM GSTR-1 shall include the

(a) Invoice-wise details of all -

(i) Inter-State and intra-State supplies made to the registered persons; and

(ii) Inter-state supplies with an invoice value of more than one lakh rupees made to the unregistered persons;

(b) Consolidated details of all -

(i) Intra-State supplies made to unregistered persons for each rate of tax; and

(ii) State-wise inter-State supplies with invoice value up to one lakh rupees made to unregistered persons for each rate of tax;

(c) Debit and credit notes, if any, issued during the month for invoices issued previously.”

Impact of the above amendment

In GSTR 1, taxable supplies to unregistered customers (B2C) are to be reported in a separate table. In such cases, supplies having a value of more than 2.5 Lakhs are to be reported invoice-wise. The remaining entries are to be combined and entered as a whole in B2C table. State-wise and rate-wise bifurcation has to be provided.

Now, this limit of 2.5 Lakhs is reduced to 1 lakh rupees. It means now all B2C entries having a value of more than 1 lakh are to be entered separately in GSTR 1- B2C- Large.

This amendment increases the compliance for the supplier as more entries are to be shown invoice-wise.

Conclusion

The Goods and Services Tax Network (GSTN) has introduced a crucial amendment affecting Business-to-Consumer (B2C) supplies. As of August 1, 2024, the invoice reporting threshold for B2C transactions in GSTR-1 has been reduced from ₹2.5 lakh to ₹1 lakh. This change impacts suppliers, requiring them to report more transactions invoice-wise.

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