10 Major GST Changes as per GST Notification 12/2024

On 10th July 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued GST Notification 12/2024, introducing a series of critical updates to the GST framework. These changes aim to enhance the accuracy, efficiency, and transparency of the tax compliance process for taxpayers. The most significant update is the introduction of the new form GSTR-1A, alongside several modifications across various GST returns. This article delves into the key updates and their implications for taxpayers.

Important updates for taxpayer are as follows:

1. Introduction of New form GSTR 1A

Form GSTR-1A allows taxpayers to make amendments or add any missing records within the same month after filing GSTR-1 or from the actual date of filing GSTR-1, whichever comes later. These changes can be made up until the filing of the corresponding GSTR-3B for the same tax period. For quarterly taxpayers, GSTR-1A will be available after filing the quarterly GSTR-1 or its due date, whichever is later, until the filing of the corresponding GSTR-3B.
Any amendments related to changes in the recipient’s GSTIN cannot be made in GSTR-1A.
Any changes made in GSTR-1A will automatically update the corresponding liability in GSTR-3B, ensuring accurate tax liability reporting. This eliminates the need to wait until the next return period for corrections and helps prevent discrepancies between GSTR-1 and GSTR-3B for the same period.
Any changes to HSN details reported in GSTR-1A should be declared in Table 12. If there’s a downward amendment, it can be recorded with a negative sign for the differential amount.

2. Impact on GSTR 2B

The introduction of GSTR-1A will also affect GSTR-2B. Transactions reported in GSTR-1A will reflect in the recipient’s GSTR-2B for the next month.

For example, if a supplier issues two invoices (INV1 and INV2) in January 2023 but only reports INV1 in their GSTR-1 on February 8, 2023, and later adds INV2 in GSTR-1A on February 15, 2023:

INV1 will appear in the recipient’s GSTR-2B for January, available on February 14, 2023.
INV2, added later through GSTR-1A, will appear in the recipient’s GSTR-2B for February, available on March 14, 2023.

3. In GSTR 2B, a new table for ITC reversal summary will be added as per Rule 37A

This table will be available only in the GSTR-2B of September of the next FY (made available in October).
Rule 37A addresses the reversal of ITC in cases where the supplier has not paid the tax.
Taxpayers must reverse the ITC availed on such supplies by 30th November of the following financial year.
Taxpayers can reclaim this ITC when the supplier files the pending GSTR-3B.

4. Negative Liability Impact on GSTR 3B

Taxpayers often encounter the challenge of managing negative liability from a previous tax period due to the non-allowance of a negative amount in GSTR 3B and manually adjusting it against their tax liabilities in the next returns (Due to excess credit note in a particular return period) However, there is a relieving development in the taxation process by allowing the negative value in Table 3 of GSTR3B and auto adjust the same in next month.

The system now auto-adjusts the negative liability of the previous tax period against the tax payable for the current tax period.

5. Updates in GSTR 1

In the updated GSTR-1 form, there have been changes to how interstate transactions with unregistered parties are categorized. Previously, such transactions were considered B2CL (Business to Consumer Large) only if the invoice value exceeded ₹2.5 lakhs. Now, this threshold has been lowered to ₹1 lakh. This means that any interstate supply to an unregistered party, where the invoice amount exceeds ₹1 lakh, must be reported as B2CL. This update aims to improve the accuracy of reporting and ensure that transactions of a significant value are correctly captured for tax purposes.

6. Updates in GSTR 7

The latest changes to GSTR-7 introduce a new format that requires invoice-level reporting instead of the previous GSTIN-wise details. This means that tax deductors must now provide detailed information for each invoice where TDS (Tax Deducted at Source) has been applied. This shift allows deductees to review and either accept or reject the TDS amounts deducted on a per-invoice basis. The change is designed to enhance the accuracy of tax deductions, simplify reconciliation, and reduce discrepancies by ensuring that all TDS transactions are reported with greater specificity.

7. Updates in GSTR 8

The recent update to GSTR-8 requires that details of supplies made through e-commerce operators be reported according to the place of supply (POS). Previously, the reporting might have been less detailed. Now, e-commerce operators must provide a breakdown of supplies based on the POS, which specifies where the goods or services were delivered. This enhancement aims to improve the accuracy of reporting and compliance, as it helps ensure that taxes are correctly accounted for based on the specific location of the supply. This detailed reporting facilitates better tracking of tax obligations and enhances transparency in the e-commerce sector.

8. Updates GSTR 9

In table 4 and table 5, new item line got added related to supplies through E-commerce operator u/s 9(5)

Table 4 – Details of advances, inward and outward supplies made during the financial year on which tax is payable. Below item line got added

4G1 – Supplies on which e-commerce operator is required to pay tax as per section 9(5) (including amendments, if any) [E-commerce operator to report]

Table 5 – Details of Outward supplies made during the financial year on which tax is not payable

5C1 – Supplies on which tax is to be paid by e-commerce operators as per section 9(5) [Supplier to report]

And as these new item lines got added its impact on calculated values will be there

Total Turnover (including advances) (4N + 5M – 4G – 4G1)

9. Updates in GSTR 6

The input tax credit available for distribution in a month shall be distributed in the same month and the details thereof shall be furnished in FORM GSTR-6 in accordance with the provisions of Chapter VIII of these rules.

For the distribution of credit in respect of input services, attributable to one or more distinct persons, subject to levy of tax under sub-section (3) or (4) of section 9, a registered person, having the same PAN and State code as an Input Service Distributor, may issue an invoice or, as the case may be, a credit or debit note as per the provisions of sub-rule(1A) of rule 54 to transfer the credit of such common input services to the Input Service Distributor, and such credit shall be distributed by the said Input Service Distributor in the manner as provided in sub-rule (1).

10. Aadhaar Authentication:

The notification mandates Aadhaar authentication for taxpayers to strengthen the verification process for GST registration and compliance. The requirement is aimed at ensuring that the information provided during registration is accurate and genuine. Taxpayers must now complete Aadhaar-based verification as part of the GST registration process, which will help in minimizing fraud and improving the credibility of the GST system. This measure will be implemented to confirm the identity and address of the registered entities, thereby enhancing the security and efficiency of the GST compliance framework.

Conclusion

The updates introduced by GST Notification 12/2024 mark significant changes aimed at improving the efficiency and accuracy of GST compliance. The introduction of Form GSTR-1A enhances the flexibility for amendments and ensures better synchronization between GSTR-1 and GSTR-3B. Changes in GSTR-2B, GSTR-7, GSTR-8, and GSTR-6 focus on refining reporting processes and improving transparency. These revisions are designed to streamline GST operations, reduce discrepancies, and facilitate smoother tax compliance. Taxpayers must adapt to these new requirements to ensure accurate reporting and avoid potential issues, thereby benefiting from a more effective GST framework.