Changes in GST, effective from 1st April, 2025

    Mandatory Input Service Distributor (ISD) mechanism for ITC

      Previously businesses could choose between ISC and Cross-charge method. But now they have to exclusively use ISD mechanism to distribute common ITC among their GST registration.

    10% mandatory pre-deposit of penalty amount for appeals before appellate authority in cases involving only demand of penalty without any demand of tax
   

    e-Invoicing

Business with Turnover over ₹10 crore (previously ₹100 crore) shall generate e-invoice and report it within 30 days from invoice date to invoice registration portal (IRP), if not, invoice is susceptible to be rejected on IRP. Also, IRN must be generated within 30 days from invoice date.

§  Generation of e-invoice (Procedure is as below)

a.       Register on e-invoice portal¹

b.       Get offline tool from portal

                                                                           i.      After logging in: help à tools à bulk generation tool

                                                                         ii.      This will provide an excel based e-invoice preparation tool.

c.        Fill in details in the tool as required

                                                                           i.      Invoice details (date, type, number)

                                                                         ii.      Supplier details

                                                                       iii.      Buyer details

                                                                       iv.      Item/service details

                                                                         v.      Additional details (if any)

                                                                       vi.      If data entry is repetitive and vast then we can preferably create masters (buyer, product, supplier) as per requirements to ease up the process.

d.       Validate and create JSON file

e.       Upload JSON file to IRP

                                                                           i.      Login

                                                                         ii.      e-invoice à Upload JSON

                                                                       iii.      select file

f.         after validation on IRP, it will assign Invoice Reference Number (IRN), then QR and Digital signature will be generated for invoices.

g.       We have successfully generated e-invoice download and print it.

 

         Multi Factor Authentication (MFA) 

Mandatory for all taxpayers from 1^st April 2025. For  login  into IRP, after entering the correct password, additional verification step will take place, it may be as per chosen method i.e. OTP on Registered mobile number/Email or authentication app (Sandes App, NIC-GST Sandes App) or biometrics (Available in future),

         Rationalization of GST rates.
          

     Unregistered person can now generate e-way bill using Form ENR-03

       ¹GST e-invoice portal  

1.     NIC-IRP 1: https://www.einvoice1.gst.gov.in

2.     NIC-IRP 2: https://www.einvoice2.gst.gov.in

      Both portals are interoperable allowing seamless switch overs between them during service disruptions i.e.  when one portal has too much load that it affects it’s operational capacity and slows down servers.

 

IMPLEMENTATION OF MANDATORY REPORTING OF HSN CODES IN TABLE 12 OF GSTR-1/1A

Phase- 2

It is 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 Aggregate Annual Turnover (AATO) in the preceding Financial Year. To facilitate the taxpayers, these changes are being implemented in a phase-wise manner on GST Portal wherein Phase 2 was implemented on GST Portal effective from 01st November 2022, Vide Notification No. 78/2020 – Central Tax dated 15th October 2020.

Till phase – 2, Manual user entry is allowed for entering HSN or description and warning or alert message is shown in case of incorrect HSN code. However, taxpayers are able to file GSTR- 1 after manual entry.

Phase- 3

Phase-3 of reporting of HSN codes in Table 12 of GSTR-1 & 1A is being implemented from February 2025 return period.

• Manual user entry of HSN w ill not be allowed.
• HSN code can be selected from drop down only.
• A customized description mentioned in HSN master w ill auto-populate in a new filed called “Description as per HSN Code”.

In Table-12 validation with regards to value of the supplies have also been introduced.

1. These validations will validate the value of B2B supplies shown in different Tables viz: 4A, 4B, 6B, 6C, 8 (recipient registered), 9A, 9B (registered), 9C (registered), 15 (recipient registered), 15A (recipient registered) with the value of B2B supplies shown in table-12.
2. Similarly, validations will validate the value of B2C supplies shown in different tables viz: 5A, 6A, 7A, 7B, 8 (recipient unregistered), 9A (export), 9A (B2CL), 9B (unregistered), 9C (unregistered), 10, 15 (recipient unregistered), 15A (recipient unregistered) with the value of B2C supplies shown in Table-12.
3. 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, whereas taxpayers will be able to file GSTR-1 in such cases. 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.

The following additional enhancement have been made in Table-12 of GSTR- 1/1A:

1. 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.
2. 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.
3. 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.

 COMPOSITE SUPPLY OF TRANSPORT OF GOODS

Enforcement agencies were raising demands for services like loading/ unloading, packing, unpacking, transshipment, temporary warehousing etc. holding them leviable to GST at the rate of 18% by interpreting last para of Question No. 6 of the FAQ issued by CBIC which states that “If such incidental services are provided as separate services and charged separately, whether in the same invoice or separate invoices, they shall be treated as separate supplies”, to mean that if a GTA shows packing charges, loading, unloading charges etc., separately in the invoice, the GTA becomes liable to pay GST at the rate of 18% on these services by treating them as cargo handling services.

Question was raised and matter was represented to clarify whether incidental/ ancillary services such as loading/ unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency service, being composite supply, or these services are to be treated as separate independent supplies

After deliberations on the issue and based on recommendations of the 54th GST Council, it is now been clarified by the GST department, vide Circular No. 234/28/2024-GST, that ancillary or incidental services provided by GTA in the course of transportation of goods by road, such as loading/unloading, packing/unpacking, transshipment, temporary warehousing etc. will be treated as composite supply of transport of goods. The method of invoicing used by GTAs will not generally alter the nature of the composite supply of service. However, if such services are not provided in the course of transportation of goods and are invoiced separately, then these services will not be treated as composite supply of transport of goods.

 

Mismatch of ITC available in GSTR-2B statement & ITC claimed in GSTR-3B return online

Compliance advisory for  GST DRC-01C - Difference in Input Tax Credit (ITC) available in GSTR-2B & ITC claimed in the GSTR-3B Return.

GSTN has developed a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by the GST Council. 

This feature is  live on the GST portal. This functionality compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. If the claimed ITC in GSTR 3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C.

Upon receiving an intimation, the taxpayer must file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both options.

In case, no response is filed by the impacted taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR-1/IFF.

source: taxation library

GST Update:- E- Invoice

E-INVOICES APPLICABLE LIMIT HAS BEEN  REDUCED TO RUPEES 5 CRORES WITH EFFECT FROM FIRST AGUST, 2023.

Source: Notification No. 10/23 Central Tax, dated 10.05.2023

GST CHANGES EFFECTIVE FROM 01.NOV. 2022

 Four-digit HSN code mandatory for GST return: From November 1, it will be mandatory for taxpayers  to provide a four-digit HSN code in the GST return with a turnover of less than Rs 5 crore.

Rule 46(s) – Declaration in tax invoice under GST

Registered persons whose Annual Aggregate Turnover (AATO) exceeds the notified limit but were exempted by CGST Notification No. 13/2020 & No. 61/2020 & No. 70/2020; eg. as below:

·       Special Economic Zone Units

·       Insurers

·       Banking companies or financial institutions, including a non-banking financial company (NBFC)

·       Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage

·       Suppliers of passenger transportation service

·       Suppliers of services by way of admission to an exhibition of cinematograph films in multiplex screens

·       Persons registered in terms of Rule 14 of CGST Rules [Online Information Database Access and Retrieval services](OIDAR)

[Declaration under Rule 46(s)] that needs to be fulfilled while generating a tax invoice by the registered person to whom by virtue of AATO, e-invoicing would have been applicable as per rule 48(4) but is not generating e-invoices due to certain exemptions notified by Govt.

Rule 46(s) was inserted by First Amendment, 2022 to the CGST Rules, 2017 vide a CGST Notification no. 14/2022 dated 5th July 2022 and will come in force on 5th July 2022.

The following declaration shall be added to the tax invoice for cases where the e-invoice is not being generated

” I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.”

Tax invoice which is required to contain the declaration under rule 46(s)?

Taxpayers whose AATO exceeds the notified limit will be required to add the declaration in the tax invoices in the following cases

Taxable Supplies	Whether an e-invoice is being generated	Declaration under rule 46(s) to be added in e-invoice
B2B	Yes	No
B2C	No	Yes
B2B or B2C supplies of an exempted category of taxpayers. eg. GTA, NBFC etc.	No	Yes