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GSTN advisory on Reporting HSN codes in GSTR-1 & GSTR-1A

GSTR 1 and GSTR 1A MENTION HSN Code

GSTN advisory on implementation of reporting HSN codes in GSTR-1 & GSTR-1A

GSTN advisory issued by GSTN regarding the implementation of Phase-III for reporting HSN codes in GSTR-1 and GSTR-1A introduces significant enhancements to streamline the reporting process.

The advisory regarding HSN code reporting in Table 12 of GSTR-1/1A highlights several changes introduced in Phase-3 of implementation.

These changes ensure: Greater accuracy and uniformity in HSN reporting, Reduced errors through validation and automation, Improved compliance and data reconciliation for GST filings.

Advisory on HSN Validation (08-01-2025) : This document provides comprehensive details on the phased implementation of HSN code reporting, validations, and enhancements introduced in the GST portal.

Mandatory Reporting of HSN Codes in in GSTR-1 & GSTR-1A:

Key Highlights of Phase-III Implementation (Effective January 2025)

  1. Mandatory HSN Reporting:
  • Turnover ≤ ₹5 Crores: Mandatory reporting of Four digit HSN codes for goods and services.
  • Turnover > ₹5 Crores: Mandatory reporting of Six digit HSN codes for goods and services.
  1. Elimination of Manual Entry:
  • Manual entry of HSN codes is no longer allowed.
  • HSN codes must be selected from a drop-down menu.
  • The corresponding description as per HSN master will auto-populate in a new file titled “Description as per HSN Code”.
  1. Validation Mechanism:
  • Validation of Supply Values:
    • For B2B supplies, values reported in Table-12 will be cross-checked with values from other relevant tables (e.g., 4A, 6B, 8, etc.).
    • For B2C supplies, values reported in Table-12 will be validated against respective B2C-related tables.
    • In case of amendments, only differential values will be validated.
  • Warning Mode: Initial validations will generate alerts or warnings but will not block the filing of GSTR-1/1A in case of mismatches.
  1. Segregation of Tabs in Table-12: Table-12 is bifurcated into two separate tabs:
    • B2B Supplies
    • B2C Supplies
      Taxpayers must enter HSN details for each category under the respective tabs.
  1. New Functionalities:
  • Download HSN Codes List: A button to download an updated Excel file containing all valid HSN & SAC codes with descriptions.
  • Searchable Product Name in “My Master”: Taxpayers can search product descriptions stored in their HSN Master, and upon selection, HSN codes, descriptions, UQC, and quantity will auto-populate. (Optional feature)
  1. Future Phases:
  • Phase 4: Yet to be announced.

Phase-Wise Summary of Reporting of HSN Codes in in GSTR-1 & GSTR-1A

Phase Turnover ≤ ₹5 Crores Turnover > ₹5 Crores Other Changes
Phase-II 4-digit HSN (manual entry allowed with warnings). 6-digit HSN (manual entry allowed with warnings). Warnings for incorrect HSN, filing still allowed.
Phase-III 4-digit HSN (from drop-down). 6-digit HSN (from drop-down). Separate tabs for B2B/B2C, validations introduced (initially in warning mode), downloadable HSN list, searchable master.
Phase-IV To be announced. To be announced. Details will be communicated later.

Mandatory Reporting of HSN Codes in Table 17 of GSTR-9:

  • Applicability: Taxpayers with a turnover above ₹5 crores must report HSN codes at a 6-digit level in Table 17 of GSTR-9. For taxpayers with a turnover up to ₹5 crores, HSN codes are to be reported at a 4-digit level.
  • Scope: HSN Summary is required for Outward Supplies (sales).
  • Timeframe: This requirement has been effective from FY 2021-22 onwards.
  • Purpose: HSN codes ensure uniform classification of goods and services for GST compliance. And They aid in data analysis and reconciliation.

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