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Important Points While Filing GSTR-1 From 01st May 2021 Onwards

Major Change in GST to be executed in GSTR 1 filed from 01st May 2021 onwards. 01st April 2021 marked the new change for imposition of 4 digit/6 digit /8 digit Harmonized System of Nomenclature (HSN)/ Services Accounting Code (SAC) codes.

These are the important points need to be noted for the GSTR-1 for the month of April 2021 to be filed from 01st May 2021 onwards:

  1. GST returns need to be reported with Harmonized System of Nomenclature (HSN) codes.
  2. Businesses who have turnover exceeding INR 5 cr. require to upload HSN summary with 6 digit HSN codes.
  3. If an individual is filing monthly GSTR-1 then April month’s HSN details need to be filed in May 2021.
  4. If an individual is filing quarterly GSTR-1, 4 digit HSN codes of April to June 2021 should be filed in July 2021.
  5. Businesses can opt to mention HSN codes voluntarily too. Businesses upto INR 5 cr. can mention 6 digits or 8 digits and businesses above INR 5 cr. can mention optionally mention 8 digits HSN. There is no bar in mentioning higher digits but when you are mentioning lower digits then there is a bar.
  6. Because of this change, now in GSTR 1- Table 12 (related with the details of outward supplies of goods or services), minimum 4 digits /6 digits /8 digits require to be mentioned there.
  7. Also, in Table 12 of GSTR 1, from 01st May 2021 onwards, total value in HSN summary is replaced by rate of tax, implying both HSN wise & rate wise sales reporting need to be done in GSTR 1’s filed.
  8. Businesses need to take stock of the various types of products and/ or services so that the HSNs can be jotted down; which may fall under the same chapter & same heading or different chapters with different headings.
  9. Last 2 digits need to be accentuate and be assured to be correctly mentioned in case of businesses above INR 5 cr. turnover. That means, last 2 digits of 6 digits require to be assured to be reported correctly in GSTR 1.
  10. The accounting software or the GST software need to be updated respectively to save last minute flaws while filing GSTR-1 from 01st may 2021 onwards.
  11. The description of goods column will now auto populate on the basis of HSN reported in GSTR-1.
  12. In the previous GSTR-1 filed for the March 2021, the criteria for HSN summary used to be HSN, description and Unique Quantity Code (UQC). Whereas for GSTR 1’s for April 2021 field from May 01st onwards, the criteria will be HSN, Rate and UQC.
  13. Section 125 which are related to General Penalty- define penalty/ fines for mistakes related to non-mentioning or mentioning wrong HSN or SAC Code on the tax invoices and Form GSTR-1, which may extend to INR 25,000/- each for CGST & SGST.