GSTR-1/1A: HSN Code Reporting Mandatory from Jan 2025

Introduction

Under the Goods and Services Tax (GST) framework, several reforms have been implemented to simplify compliance and improve the accuracy of tax reporting. A key update is the mandatory inclusion of HSN (Harmonized System of Nomenclature) codes in GSTR-1, particularly in Table 12. Starting January 2025, the third phase of HSN validation will be enforced, placing greater emphasis on accurate HSN code reporting for businesses. This article provides a detailed overview of the latest changes, explains the phased implementation, and highlights the improvements to HSN validation in Table 12 of GSTR-1.

New Update: Mandatory HSN Code & Document Details Reporting in GSTR-1/1A from May 2025

Starting with the May 2025 return period, GSTN has rolled out Phase 3 of the HSN code reporting requirement in Table 12 of GSTR-1/1A, based on the taxpayer’s Aggregate Annual Turnover (AATO).

HSN Code Reporting: Taxpayers must report minimum 4-digit or 6-digit HSN codes as per AATO guidelines, continuing the phased implementation from previous updates.
Table 13 Mandatory: Taxpayers are now required to complete Table 13, providing details of documents issued during the tax period.
Effective Date: These changes take effect from returns filed for May 2025 onwards

Latest Update: Phase-III Rollout of Table-12 in GSTR-1 and GSTR-1A from April 2025

The GST Network (GSTN) will implement Phase-III changes to Table-12 of GSTR-1 and GSTR-1A starting from the April 2025 tax period. This phase is part of the ongoing enhancements aimed at improving the accuracy and ease of HSN code reporting.

Key highlights of Phase-III include:

Separate Reporting for B2B and B2C Supplies: Table-12 is now divided into two sections, allowing taxpayers to report HSN-wise summaries separately for B2B and B2C transactions.
Mandatory HSN Selection via Dropdown: Manual entry of HSN codes will be discontinued. Taxpayers must choose the correct HSN code from a predefined dropdown list, ensuring consistency and reducing errors

Latest Update: Revised Effective Date for Mandatory HSN Code Reporting in GSTR-1/1A

The GST portal has released a new advisory regarding the mandatory inclusion of HSN (Harmonized System of Nomenclature) codes in GSTR-1 and GSTR-1A. Originally announced on January 9, 2025, with implementation set for the January 2025 tax period, the timeline has now been revised. As per the updated advisory issued on January 22, 2025, the requirement will take effect starting from the February 2025 tax period. For detailed guidelines, please refer to the attached official document.

Introduction to HSN Reporting in GSTR-1

Under the GST framework, HSN (Harmonized System of Nomenclature) codes classify goods and services to ensure accurate and efficient tax collection. These codes help categorize traded items, improving the precision of GST filings. To enhance compliance, the government has mandated HSN code reporting in GSTR-1, which businesses file either monthly or quarterly based on their turnover.

In GSTR-1, Table 12 is designated for reporting HSN summary details. Taxpayers must provide the HSN codes for the goods and services supplied during the tax period. The specific HSN reporting requirements depend on a business’s Aggregate Annual Turnover (AATO), allowing guidelines to be tailored to the scale of each taxpayer’s operations

Latest Update: Mandatory HSN Code Reporting in GSTR-1/1A Starting January 2025 Returns

As per Notification No. 78/2020 – Central Tax dated 15th October 2020, taxpayers are required to report HSN codes—at least 4-digit or 6-digit—in Table 12 of GSTR-1, based on their Aggregate Annual Turnover (AATO) from the previous financial year. To facilitate a smooth transition, the GST Portal has implemented this in phases, with Phase 2 beginning on 1st November 2022.

Continuing this phased rollout, Phase 3 for HSN code reporting in Table 12 of GSTR-1 and GSTR-1A will take effect from the January 2025 return period.

For detailed information, please refer to the attached official notification on HSN code reporting in Table 12 of GSTR-1/1A.

Phase-Wise Implementation of HSN Reporting

To ensure a smooth transition and give taxpayers ample time to adapt, the government has introduced HSN reporting requirements in phases. Here’s a detailed overview of each phase:

Phase 1: Initial Phase (Pre-2020)
HSN reporting was optional for small businesses with lower turnover and mandatory only for those with higher turnover. This limited approach revealed gaps in GST reporting, leading to the decision to make HSN reporting compulsory.

Phase 2: Mandatory HSN Reporting (Effective from 1st November 2022)
Applicability:

Businesses with Aggregate Annual Turnover (AATO) exceeding ₹5 crore are required to report 6-digit HSN codes in Table 12 of GSTR-1.
Businesses with AATO up to ₹5 crore must report 4-digit HSN codes.

Manual Entry:
During this phase, taxpayers could manually enter HSN codes or descriptions. The GST Portal issued warnings or alerts if incorrect or manually entered codes were detected, but these alerts did not block the filing of GSTR-1 returns

Phase 3: Enhanced HSN Reporting (Effective January 2025)

The third phase of HSN reporting introduces significant updates, effective from the January 2025 return period:

For Businesses with AATO up to ₹5 Crore:

Reporting of 4-digit HSN codes for both goods and services becomes mandatory.
Manual entry of HSN codes is prohibited; taxpayers must select codes from a predefined dropdown list.
A new field, “Description as per HSN Code,” will auto-populate based on the selected code.

For Businesses with AATO above ₹5 Crore:

Reporting of 6-digit HSN codes for goods and services is mandatory.
Manual entry is disallowed; selection must be made from the dropdown list.
Corresponding descriptions will automatically populate according to the selected HSN code.

These changes aim to reduce errors and improve the accuracy of GST filings. Through this phased tightening, the government promotes better compliance and more reliable GST data.

HSN Validation Mechanism in Phase 3

Phase 3 introduces validation checks to ensure consistency between reported values for both B2B and B2C transactions in Table 12 of GSTR-1:

B2B Supplies Validation:
The values of B2B supplies reported in tables such as 4A, 4B, 6B, 6C, 8 (recipient registered), 9A, 9B (registered), 9C (registered), 15 (recipient registered), and 15A (recipient registered) will be cross-verified with the B2B figures in Table 12. This ensures consistent and accurate reconciliation across the return.

B2C Supplies Validation:
Values of B2C supplies reported in tables including 5A, 6A, 7A, 7B, 8 (recipient unregistered), 9A (export/B2CL), 9B (unregistered), 9C (unregistered), 10, 15 (recipient unregistered), and 15A (recipient unregistered) will be validated against B2C values in Table 12. This minimizes discrepancies and enhances reporting accuracy.

Additional Details

Amendments: Only the difference in amended returns will be considered during validation.
Warning Mode: Initially, mismatches will trigger warning alerts but will not block filing. Taxpayers will be informed of discrepancies but can proceed with return submission.
Important: If B2B supplies are reported elsewhere in GSTR-1, the B2B section in Table 12 cannot be left empty

Additional Enhancements in Table 12 of GSTR-1/1A

Alongside mandatory HSN reporting and validation improvements, Table 12 of GSTR-1/1A has been upgraded with new features to simplify filing and enhance user experience:

Bifurcation into B2B and B2C Tabs

Separate Sections: Table 12 now features two distinct tabs—“B2B Supplies” and “B2C Supplies.”
Improved Clarity: Taxpayers must enter HSN summary details under the correct tab, ensuring clear separation between business-to-business (B2B) and business-to-consumer (B2C) transactions.

“Download HSN Codes List” Button

Up-to-Date Codes: A new button enables taxpayers to download an Excel sheet containing the latest HSN and SAC codes along with their descriptions.
Convenient Reference: This helps verify correct code selection for goods and services, reducing errors.

Searchable “Product Name as in My Master” Feature

Quick Lookup: The product name list is now searchable, allowing taxpayers to easily find saved product descriptions from their HSN Master.
Auto-Population: Selecting a product automatically fills in the HSN Code, Description as per HSN Code, UQC, and Quantity fields, minimizing manual input.
Optional but Helpful: While not mandatory, this feature can significantly save time and improve accuracy during filing

Simplify Your GST Return Filing with IndiaFilings

Want to make GST return filing easier and stay fully compliant with the latest HSN reporting requirements? Partner with IndiaFilings today. Our expert team will assist you at every stage—from choosing the right HSN codes to ensuring precise data validation—helping you file confidently while you concentrate on growing your business

About the Author

Rohan

Rohan is a skilled writer who excels at simplifying complex legal concepts into clear, practical guidance. Her articles equip entrepreneurs with the essential knowledge to navigate business laws confidently, helping them successfully start and manage their ventures

May 31, 2025

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