New

Published on:

July 10, 2025

Alankar Mishra

Blog |

Explore GST

Basics of GST

New HSN Reporting Rules in GSTR-1 from April 2025

As of April 1, 2025, the Goods and Services Tax Network (GSTN) will require businesses to report HSN codes separately for B2B and B2C transactions in Table 12 of GSTR-1. This change has been made to enhance accuracy, minimise discrepancies, and facilitate smoother ITC flow. Every manufacturer, service provider, and e-commerce seller will have to update their compliance processes due to these new GSTR-1 reporting requirements.

Previously, businesses were permitted to enter HSN details for all outward supplies in a single row; this is no longer permitted. You must now provide separate rows for B2B and B2C invoices, or your return filing will be rejected. This is an improvement toward more robust real-time invoice analytics and automated auditing.

What Is the New Rule?

Previously, you could merge all sales, whether B2B or B2C, under one HSN code entry. The GST portal no longer allows this, though. You now have to display separate rows for:

1. B2B (Business-to-Business) sales: These are sales made to other businesses that are registered under GST. The buyer can usually claim input tax credit on such purchases.

2. B2C (Business-to-Consumer) sales: These are sales made directly to end consumers or individuals who are not registered under GST. No input tax credit is involved for the buyer.

If you attempt to combine the two, the system will reject your return.

Why Was This Change Made?

According to the GSTN advisory released on May 20, 2025, this update is to:

1. Improve data accuracy.

2. Help GST officers with better tracking.

3. Reduce mismatch issues in GSTR-2B reconciliation.

4. Make audits easier and faster.

It’s also part of a larger goal by the GST Council to ensure real-time invoice-level tracking.

Who Must Follow This Rule?

This rule applies to all regular taxpayers who file monthly or quarterly GSTR-1 returns, such as:

1. Private Limited Companies.

2. LLPs and Partnership Firms.

3. Proprietorships with GST registration.

4. E-commerce sellers.

5. Service providers (above the exemption limit).

Who’s exempt? Only Composition Scheme taxpayers who file CMP-08 are not affected.

How to File Table 12 HSN Summary Correctly

Here’s how to file it step-by-step:

1. Log in to the GST portal and open your GSTR-1 return

2. Go to Table 12 (HSN Summary).

3. Add HSN details for B2B sales in one row.

4. Add HSN details for B2C sales in another row.

5. Double-check that your quantity, tax value, and tax amount match your outward supplies.

6. Click save, then validate, and finally file your return.

Important: The portal will not allow you to save or file if you put both B2B and B2C values in one row under one HSN code.

Sample Format of Table 12 (HSN-wise Summary of Outward Supplies)

(As per new GSTN guidelines effective from 1st April 2025).

HSN Code	Description of Goods/Services	UQC	Total Quantity	Total Taxable Value	Integrated Tax	Central Tax	State/UT Tax	Cess	Supply Type
84099990	Parts of diesel engines	NOS	150	₹3,00,000	₹0	₹27,000	₹27,000	₹0	B2B
84099990	Parts of diesel engines	NOS	50	₹1,00,000	₹0	₹9,000	₹9,000	₹0	B2C

Pro Tip to Avoid Mistakes

GST expert CA Priya Mahadevan suggests:

“Use the offline Excel template given by GSTN to prepare your HSN data. Double-check your B2B and B2C rows before uploading.”

This helps avoid common errors during upload.

Why This Change Is Important

The effects of such a minor change are profound, as it:

1. Improves the accuracy of an input tax credit.

2. Decreases the risk of receiving GST mismatch alerts.

3. Facilitates seamless reconciliation of e-invoices with GSTR-1.

4. Streamlines and enhances the efficiency of GST audits.

Mistakes You Should Avoid

1. Refrain from amalgamating B2B and B2C under one HSN code.

2. Do not ignore the nil-rated or exempted supplies.

3. GSTR-1 should not be filed unless the Table 12 summary is audited thoroughly.

Legal Background

This is an explanation from the 59th rule of the CGST rules of 2017, with recommendations from the GST Council. The aim is to make the tracking and reporting of supply data more efficient and seamless.

Conclusion

From April 1, 2025, all regular GST filers are required to mention HSN codes separately for B2B and B2C sales in GSTR-1 Table 12. It may seem like a tiny detail, but it’s critical for proper GST compliance.

Not adhering to this could cause errors in returns or result in credits being missed. Be sure to file accurately by following this change and properly utilising the GSTN tools.

FAQs

Q1. What is the new HSN reporting rule in GSTR-1?

Starting April 1, 2025, you are required to distinctly indicate HSN details for B2B and B2C transactions in Table 12 of GSTR-1. It is no longer permitted to combine both in a single row.

Q2. What are B2B and B2C supplies?

B2B (business-to-business) sales are transacted with other businesses registered under the Goods and Services Tax (GST).

B2C (Business to Customer) comprises sales transacted with individual customers, who do not possess a GST registration.

Q3. Why has this change been made?

The goals of the GST system are to:

1. Enhance the quality of data.

2. Simplified tracking of invoices.

3. Minimise discrepancies in returns.

4. Assist in audits and expedite tax processing.

Q4. Who needs to follow this new rule?

All ordinary taxpayers who submit GSTR-1:

1. Corporations.

2. Limited Liability Partnerships (LLP) alongside partnership firms.

3. Retail and wholesale shops that are registered under GST.

4. Providers of services that exceed the minimum taxable turnover threshold.

5. Vendors operating from remote locations.

Q5. Who is exempt from this rule?

Only individuals categorised under the Composition Scheme and who submit their CMP-08 returns are eligible. The rest must comply.

Q6. Where do I add this information in GSTR-1?

Navigate to your GSTR-1 return and open Table 12 – HSN Summary. Please input one row for B2B and one row for B2C, ensuring to include the correct HSN codes and values.

Q7. What happens if I mix B2B and B2C values in one row?

The GST portal has restrictions on saving or filing returns, which can only be resolved by modifying and entering distinct rows.

Q8. Do I need to include exempted or nil-rated items?

Indeed, exempt or nil-rated supplies are also required to be included in the HSN summary against the appropriate code.

Q9. How can I prepare the data easily?

Take advantage of the GST portal's Excel template. Arrange your HSN data with B2B and B2C sales in different rows, then upload the file.

‍

Featured Posts

GST rates and HSN code 2530 for Mineral Substances.

GST rates and HSN code 6107 for Men's Underpants and briefs.

Power of GST Officers to Seize Cash During Searches

Full Guide on GST Invoice – Information and Right Format

How to Choose the Perfect Location When Planning to Open a Grocery Store

How to Apply PAN Card Online- Step-by-Step Guide

Nails, Tacks, Drawing Pins HSN Code & GST Rate - 7317

Coconut HSN Code & GST Rate - 0801

Featured Posts

Related Blog Posts

Common Errors & Mistakes during GSTR-1 Filings

How GST Has Impacted the Restaurant Industry in India

GST Rate for Articles of Iron or Steel (HSN Code 73) – Complete Guide

Circular No. 171/03/2022-GST: Made Easy Guide to Fake Invoicing and Its Implications

GST on Credit Notes Under Section 34 of the CGST Act: Key Conditions

GST Rates and HSN Code 7418 for Kitchen Articles of Copper: Complete Guide for Sellers & Manufacturers

Looking for a billing software?

Quick Links

Learn More

Testimonials