GSTR 1/1A HSN-related changes are live on the portal!

The GSTN has announced the launch of Phase III for mandatory HSN code reporting in GSTR-1 and GSTR-1A, effective from the February 2025 return period. This phase will replace the manual entry of HSN codes with a dropdown selection, ensuring greater accuracy. Additionally, Table 12 will be split into B2B (business-to-business) and B2C (business-to-consumer), providing clearer reporting for these transactions. New validations for supply values and tax amounts will be introduced, but initially, these validations will be in warning mode, meaning they won’t block return filing if not met.

Let’s understand in detail!

Advisory dated Jan 22nd, 2025

Implementation of mandatory mentioning of HSN codes in GSTR-1 & GSTR 1A

Jan 22nd, 2025

After the successful implementation of Phase-I & Phase-II now Phase-III regarding Table 12 of GSTR-1 & 1A is being implemented, from the return period of February 2025. In this phase manual entry of HSN has been replaced by choosing the correct HSN from the given Dropdown. Also, Table 12 has been bifurcated into two tabs namely B2B and B2C, to report these supplies separately. Further, validation regarding values of the supplies and tax amounts involved in the same, have also been introduced for both the tabs of Table-12. However, in the initial period these validations have been kept in warning mode only, which means failing the validation will not be a blocker for filling of GSTR-1& 1A. To view the detailed advisory please click here

Thanking You,

Team GSTN

What are the significant changes that have taken place?

1. Dropdown for HSN Codes

• Manual entry of HSN codes is now replaced with a dropdown selection for improved accuracy.

2. Table-12 Split

• Table 12 is now divided into B2B (Business-to-Business) and B2C (Business-to-Consumer) sections for clearer reporting.

3. New Validations

• Validations for supply values and tax amounts have been introduced for both B2B and B2C sections.
• These validations will initially appear as warnings, not blockers, allowing GSTR-1 and GSTR-1A filings to proceed even if they fail.
• During the initial phase, validation failures will not prevent return filing.

Implementation

Phase 3  changes in GSTR-1 & 1A are postponed for implementation in February 2025 return period. As per the earlier advisory, the changes were expected in January 2025. To learn more read- GSTR 1/1A HSN Wise

Conclusion

Starting February 2025, GSTN will require mandatory HSN code reporting in GSTR-1/1A, replacing manual entry with a dropdown selection. Table 12 will be divided into B2B and B2C sections for separate reporting.

New validations for supply values and tax amounts will be introduced but will only show warnings initially, not blocking the filing. This change aims to improve GST tracking, reduce tax evasion, and enhance transparency in compliance.

‍