GST WEEKLY UPDATE : 02/2025-26 (13.04.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Advisory on Table-12 of GSTR-1 or GSTR-1A:

It to inform that GSTN has implemented phase wise changes in Table-12 of GSTR-1 or GSTR-1A. For the same various advisories have been issued time to time, which are available on GST Portal. GSTN is going to implement Phase-III of Table 12 of GSTR 1 & 1A from April, 2025 tax period onwards. Which implies:

(1).    Table-12 has been bifurcated into two tables namely B2B and B2C, to report these summary of these supplies HSN wise separately in corresponding table.

(2).    Manual entry of HSN will not be allowed. Taxpayer will be able to choose correct HSN from given Drop down.

After successful implementation of Phase-I & Phase-II now Phase-III regarding Table 12 of GSTR-1 & 1A will be implemented soon. In this phase manual entry of HSN has been replaced by choosing correct HSN from given Drop down. Also, Table-12 has been bifurcated into two tabs namely B2B and B2C, to report these supplies separately. Further, validation regarding values of the supplies and tax amounts involved in the same, have also been introduced for both the tabs of Table-12. However in initial period these validations have been kept in warning mode only, which means failing the validation will not be a blocker for filling of GSTR-1& 1A.

• Apart from above, 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.

1. 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.

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.

1. Advisory on reporting values in Table 3.2 of GSTR-3B

1. Table 3.2 of Form GSTR-3B captures the inter-state supplies made to unregistered persons, composition taxpayers, and UIN holders out of the supplies declared in Table 3.1 & 3.1.1 of GSTR-3B. The values in Table 3.2 of GSTR-3B auto-populates from corresponding inter-state supplies declared in GSTR-1, GSTR-1A, and IFF in requisite tables.

2. It is to inform you that from April-2025 tax period,inter-state supplies auto-populated in Table 3.2 of GSTR-3B will be made non-editable. The GSTR-3B shall be filed with the auto-populated values as generated by the system only.

3. Therefore, in case any modification/amendment is required in auto-populated values of Table 3.2 of GSTR-3B, same can be done only by amending the corresponding values in respective tables of GSTR-1A or through Form GSTR-1/IFF filed for subsequent tax periods.

4. To ensure that GSTR-3B is filed accurately with the correct values of inter-state supplies, it is advised to report the correct values in GSTR-1, GSTR-1A, or IFF. This will ensure the auto-populated values in Table 3.2 of GSTR-3B are accurate and compliant with GST regulations. 

FAQ’s

1. What are the changes related to reporting supplies in Table 3.2?

Starting from the April 2025 tax period, the auto-populated values in Table 3.2 of GSTR-3B for inter-state supplies made to unregistered persons, composition taxpayers, and UIN holders will be non-editable, and taxpayers will need to file GSTR-3B with the auto-populated values generated by the system only. 

2. How can I rectify values in Table 3.2 of GSTR-3B if incorrect values have been auto-populated after April 2025 period onwards due to incorrect reporting of the same through GSTR-1?

If incorrect values are auto-populated in Table 3.2 after April 2025, taxpayers need to correct the values by making amendments through Form GSTR-1A or through Form GSTR-1/IFF filed for subsequent tax periods. 

3. What should I do to ensure accurate reporting in Table 3.2 of GSTR-3B?

Taxpayers should ensure that the inter-state supplies are reported correctly in their GSTR-1, GSTR-1A, or IFF. This will ensure that the accurate values are auto-populated in Table 3.2 of GSTR-3B. 

4. Till what time/date I can amend values furnished in GSTR-1 through Form GSTR-1A?

As there is no cut-off date for filing Form GSTR-1A before GSTR-3B which means Form GSTR-1A can be filed after filing Form GSTR-1and till the time of filing Form GSTR-3B. Hence, any amendment required in auto-populated values of table 3.2, same can be carried out through Form GSTR-1A till the moment of filing GSTR-3B.

3. Important AAR:

(i) AAR On No input tax credit permissible for expenditure on buyback of shares:

             (Applicant – Gujarat Narmada Valley Fertilizers & Chemicals Limited)

Securities are neither goods nor services, so no input tax credit (ITC) is permissible on expenditure for buyback of shares, Gujarat’s Authority for Advance Ruling (AAR) said in the matter of Gujarat Narmada Valley Fertilizers & Chemicals Limited.

“The applicant is not eligible to avail the ITC involved in the expenditure incurred for buyback of its share and also required to reverse the ITC on common inputs and input services used in relation to the expenditure incurred for buyback of share,” a two members bench of AAR said in a recent ruling. The applicant had argued that since the buyback is in the course or furtherance of the business activity, the ITC on expenses incurred towards the buyback process should be considered as an eligible expenditure for the purpose of ITC.

Also, since buyback of the shares qualifies to be business expenditure, the company believed they are entitled to claim ITC on GST paid on expenses related to buyback of shares. It further stated that buyback of shares improves company’s financial standing, creates value for shareholders, contributes prestige and promotes the company’s image, reduces equity capital, leads to improved shareholders return; that it is a simple way to pay off investors and reduce the overall cost of capital. Thus, “buyback extends beyond just acquiring shares,” the company said.

After going through all the arguments and facts presented, the bench reproduced section 16(1) of CGST Act 2017 which states that every registered person shall be entitled to take credit of ITC charged on any supply of goods or services or both used or intended to be used in the course or furtherance of business. Now, based on readings of various other sections, it is clear that the activity undertaken, i.e. buy-back of shares by the applicant is neither a supply of goods nor supply of services.

Therefore, in terms of section 16(1), “we find that the applicant is not eligible for availing ITC on the expenditure incurred for the buyback of its shares, it neither being goods nor services, a primary condition for availment of ITC,” it said. Further, the thrust of the applicant’s argument is that the expenses incurred towards the buyback of shares is in the course or furtherance of the business activity and therefore, should be considered as eligible expenditure for the purpose of ITC.

‘This averment needs to be examined only if the expenditure incurred is towards goods or services. The term ‘securities’ is excluded from both goods and services. The primary requirement for availment of ITC not having been met, we do not intend to go into the averment as to whether the same is in the course or furtherance of business activity or otherwise, since it would only be an academic exercise,” the bench concluded and disposed the application.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(The author is a well known Chartered Accountant practicing in the field of Direct and Indirect Taxes at Ahmedabad)