Starting with the January 2025 return period, Table 12 of GSTR-1 and 1A has been updated to Phase-III HSN reporting after successful implementation of Phase-I & Phase-II.
In Phase-III, the table is now divided into two tabs: B2B and B2C for separate reporting for these supplies. Manual entry of HSN codes has been replaced by a dropdown selection.
What was Phase-I & Phase-II?
Phase-I for Reporting of HSN codes in GSTR-1
As per the Notification No. 78/2020 – Central Tax dated 15th October, 2020, it was made mandatory for the taxpayers to report minimum 4 digits or 6 digits of HSN Code in Table-12 of GSTR-1 on the basis of their Aggregate Annual Turnover (AATO) in the preceding Financial Year.
There are two parts in Phase-I. Part 1 of Phase I has implemented from 01st April 2022 and from 01st August, 2022, Part-II of Phase-I implemented on GST Portal.
| Parts | Taxpayers with AATO of up-to 5 cr. | Taxpayers with AATO of above 5 cr. |
| Part I | Taxpayers were required to mandatorily report 2-digit HSN codes for goods & services. | Taxpayers was required to mandatorily report 4-digit HSN codes for goods & services. |
| Part II | Same as above | Taxpayers have to mandatory report 6-digit HSN code. |
- Manual user entry was allowed for entering HSN or description and warning or alert message has shown in case of incorrect HSN code.
- However, taxpayers are able to file GSTR-1 after manual entry.
Phase-II for Reporting of HSN codes in GSTR-1
From 01st November, 2022, Phase-2 was implemented on GST Portal and the taxpayers were required to report HSN in table 12 of GSTR-1 as per below mentioned scheme.
| Taxpayers with AATO of upto 5 cr. | Taxpayers with AATO of above 5 cr. |
| Taxpayers are required to mandatorily report 4-digit HSN code. | Taxpayers have to report 6-digit HSN code. |
- Manual user entry was allowed for entering HSN or description and warning or alert message has shown in case of incorrect HSN code.
- However, taxpayers are able to file GSTR-1 after manual entry.
Phase-III: Changes in HSN Reporting
Phase-3 of reporting of HSN codes in Table 12 of GSTR-1 & 1A is being implemented from January 2025 return period. The changes implemented are detailed below.
- Taxpayers with AATO of up-to 5 crore: Taxpayers are required to mandatorily report 4-digit HSN codes for goods & services.
- Taxpayers with AATO of above 5 crore: Mandatorily reporting 6-digit HSN codes for goods & services.
Key Changes
- Manual user entry of HSN will not be allowed.
- Users can only select HSN codes from a dropdown list.
- A customized description mentioned in HSN master will auto-populate in a new filed called “Description as per HSN Code”.
Validations in Table 12
Table 12 will now validates the values of B2B and B2C supplies against their respective sections in GSTR-1.
B2B Supply Validation
- Validates the value of B2B supplies reported in Table 12 with other tables, including: 4A, 4B, 6B, 6C, 8 (recipient registered), 9A, 9B (registered), 9C (registered), 15, and 15A (recipient registered).
B2C Supply Validation
- Validates the value of B2C supplies reported in Table 12 with other tables, including: 5A, 6A, 7A, 7B, 8 (recipient unregistered), 9A (export/B2CL), 9B (unregistered), 9C (unregistered), 10, 15, and 15A (recipient unregistered)
Note:
Reporting of B2C supplies are optional for those whose turnover is up to 5 crore.
Amendment Validation
- In case of amendments, only the differential value will be taken for the purpose of validation.
However, initially these validations have been kept in warning mode only, that means warning or alert message shall be shown in case of mismatch in values, but won’t block the return filing process.
Further, in case B2B supplies are reported in other tables of GSTR-1, in that case B2B tab of Table-12 cannot be left empty.
Points To Note
Apart from above, the following additional enhancement have been made in Table-12 of GSTR1/1A:
- Table 12 of GSTR-1/1A is now bifurcated into two tabs, namely, “B2B Supplies” & “B2C Supplies”. Taxpayers need to enter HSN summary details of B2B Supplies and B2C Supplies separately under respective tab.
- A new button has been introduced in Table 12, “Download HSN Codes List”. Upon clicking of this button, taxpayer would be able to download an excel file with the updated list of HSN & SAC codes for goods and services along with their description.
- The button for “Product Name as in My Master” has now been made searchable. Taxpayer can search the description provided by them in My HSN Master and upon selection of the same, the HSN code, Description as per HSN Code, UQC & Quantity shall be auto-populated. This is an optional functionality.