Proposed Changes or Disclosures in GST Returns
Proposed Changes in GST Returns 2022
To increase taxpayer convenience, the CBIC has proposed to make certain changes or disclosures in the GST returns. The CBIC has also proposed a separate amendment table in GSTR-3B to display the changes made by the taxpayers in GSTR-1, which contains details of all the sales made by a business. Proposed Changes in GST Returns are discussed in this present article.
Synopsis of Proposed Changes in GST Returns
- A new Table 3.1.1 is being added in GSTR-3B where both Electronic Commerce Operator (ECO) and registered persons can report supplies made under Section 9(5).
- Taxpayers are required to report the supplies made to composition dealers, unregistered persons, or UIN Holders
- From 1st August 2022, the taxpayers having ATTO of more than 5 Crores would need to report HSN in table 12 of GSTR-1:
- CBIC has also notified a few changes in Table 4 of Form GSTR 3B requiring taxpayers to report information on ITC correctly availed, reversal thereof, and declaring ineligible ITC in Table 4 of GSTR 3B.
Proposed Changes in the GSTR-3B
To increase taxpayer convenience and ease of filing returns, the CBIC has proposed a set of changes in the GSTR-3B form, which is a composite return form that has details of sales, purchases, and input tax credit (ITC) and taxes to be paid.
New Table in GSTR 3B to report supplies made under Section 9(5)
A new Table 3.1.1 is being added as per Notification No.14/2022 -Central Tax dated 05th July 2022 in GSTR-3B where both Electronic Commerce Operator (ECO) and registered persons can report supplies made under Section 9(5).
As per Section 9(5) of the CGST Act, Electronic Commerce Operator (ECO) is required to pay tax on the supply of services such as Passenger Transport services, Accommodation services, Housekeeping Services, and Restaurant Services, if such services are supplied through ECO.
- An ECO is required to report supplies made under section 9(5) in Table 3.1.1(i) of GSTR-3B and shall not include such supplies in Table 3.1(a) of GSTR-3B.
- The applicable tax on such supplies shall be paid by ECO in Table 3.1.1(i) of GSTR-3B in cash only and not by ITC.
- A registered person, who is making supplies of such services as specified u/s 9(5) through an ECO, shall report such supplies in Table 3.1.1(ii) and shall not include such supplies in Table 3.1(a) of GSTR-3B.
- The registered person is not required to pay tax on such supplies as the ECO is liable to pay tax on such supplies
Change in process of furnishing information regarding ITC and its reversal in GSTR 3B
The Government vides Notification No. 14/2022 – Central Tax dated 05th July 2022 has notified few changes in Table 4 of Form GSTR 3B requiring taxpayers to report information on ITC correctly availed, reversal thereof, and declaring ineligible ITC in Table 4 of GSTR 3B.
CBIC has also advised viding Circular No.170-02-2022-GST dated 6th July 2022 for mandatory disclosure of reversal of ITC as per the certain changes in the GSTR 3B. The proposed format of Table 4 of GSTR-3B is as follows:
Now, the taxpayer needs to mandatorily disclose the following reversal as per the proposed changes in Table 4 of GSTR 3B:
- Total ITC will be auto-populated from GSTR-2B into Form GSTR-3B except for ineligible ITC under section 16(4) of CGST Act,2017 and ineligible ITC where the recipient of Inter-state Supply is located at a place other than the place of supply.
- Reversal of ITC which is not re-claimable such as reversal under Rule 38, 42, and 43 of CGST Rules, 2017 and under section 17(5) of CGST Act, 2017.
- Registered Person will also report the ITC reversed for now which will be reclaimed on fulfillment of certain conditions like ITC reversed because of non-payment of consideration to the supplier within 180 days, can be re-claimed after making such payment.
- Table 4(B)(2) may also be used by a registered person for reversal of any ITC availed in Table 4(A) in previous tax periods because of some inadvertent mistake.
Changes in the GSTR-1
Proposed Changes in the GSTR-1 are explained in detail below:
Reporting of supplies made to an unregistered person, composition dealers, or UIN Holders
As per Circular No.170-02-2022-GST dated 6th July 2022, it is being made mandatory for taxpayers to report the supplies made to composition dealers, unregistered persons, or UIN Holders under Table 3.2. This information will also be auto-populated from GSTR-1.
The mandatory mentioning of HSN codes in GSTR-1
The Goods and Services Tax Network (“GSTN”) has issued an Advisory dated July 20, 2022, regarding the implementation of mandatory mentioning of HSN codes in GSTR-1.
Vide Notification No. 78/2020 – Central Tax dated October 15, 2020, it is mandatory for the taxpayers to report a minimum of 4 digits or 6 digits of HSN Code in Table-12 of GSTR-1 based on their Aggregate Annual Turnover (AATO) in the preceding Financial Year.
From 1st August 2022, the taxpayers having ATTO of more than 5 Crores would need to report HSN in table 12 of GSTR-1:
| Phase | Part | Taxpayers with AATO of up to 5 cr. | Taxpayers with AATO of more than 5 cr. |
| Phase 1 | Part I |
Taxpayers are required to mandatorily report 2-digit HSN codes for goods & services. Manual user entry is allowed for entering HSN or description and warning or alert messages hall be shown in case of manual HSN. However, taxpayers will be able to file GSTR-1 after manual entry. |
Taxpayers are required to mandatorily report 4-digit HSN codes for goods & services. Manual user entry is allowed for entering HSN or description and a warning or alert message shall be shown in case of an incorrect HSN code. However, taxpayers will be able to file GSTR-1 after manual entry. |
| Part II | Same as above |
Taxpayers will now have to mandatory report a 6-digit HSN code. No change in other conditions |
Part 1 of Phase I have already been implemented from April 01, 2022, and is currently live on the GST Portal. From August 01, 2022, Part-II of Phase-I would be implemented on GST Portal and the taxpayers would need to report HSN in table 12 of GSTR-1
Taxpayers would be required to mandatorily report a 6-digit HSN code
