Implementation of Rule-59(6) and HSN with GSTR-1 Filing Explained

The CBIC has recently issued Advisories 500 and 501 on 26th August 2021 dealing with furnishing of form GSTR-1/IFF and addressing the issues related to HSN while filing of GSTR-1 respectively. These advisories are being implemented on the GST Portal from 1st September 2021. Reason for the issuance of these advisories is to communicate the plan for regularising the return filing process and communicating the successful removal of the technical glitches. This article focuses on simplifying the advisories 500 and 501 for our readers and helping them understand the gist of it.

1. Advisory 500 Suggests compulsory filing of the GSTR-3B or explanation of Rule-59(6)

From 01 September 2021, A Registered person shall not be allowed to furnish FORM GSTR-1 or Invoice Furnishing Facility under GST (IFF), if he has not furnished the following forms:

FORM GSTR-3B for preceding 2 months OR
If he has not furnished FORM GSTR-3B for preceding quarter (QRMP).

Implementation of Rule-59(6) on GST Portal

The GSTN system will check that whether before filing of GSTR 1/IFF of a tax-period, the following has been filed or not :

FORM GSTR-3B for preceding 2 months OR
If he has not furnished FORM GSTR-3B for preceding quarter (QRMP).

The advisory 500 states about the procedure for implementing Rule 59(6). Below are the details of advisory 500:

When the taxpayer will try to submit his GSTR-1, the system will give an error message if the condition of Rule-59(6) is not met.
Implementation of Rule-59(6) on the GST Portal will be completely automated, similar to the blocking & un-blocking of e-way bills. On noticing any non-compliance the portal will automatically block the filing of the FORM GSTR-1 for the relevant taxpayer.
The facility for filing of GSTR-1 will be restored immediately after filing of relevant GSTR-3B. Taxpayers should note that –no separate approval would be needed from the tax-officer to restore the facility for filing of GSTR-1
To ensure no disruption in filing GSTR-1/IFF, taxpayers who have not filed their pending GSTR-3B, especially from November 2020 and afterwards should file it as soon as possible to avoid the inconvenience.

2. Advisory 501 – Addresses the issue regarding HSN and GSTR-1 Filing

HSN is a 8-digit uniform code that classifies products and is accepted worldwide. It stands for Harmonised System of Nomenclature (HSN Code). The taxpayers were made compulsory to declare Harmonised System of Nomenclature (HSN) Code of Goods and Services supplied by them on raising of tax invoices, according to Notification No. 78/2020 – Central Tax, dated October 15, 2020, with effect from 1st April 2021. Here is the list of the products in which HSN has to be included while issuing the invoice. There was an issue reported about the same.

The issue reported by the few taxpayers was – the HSN used by them for reporting in GSTR-1 was not available in the table 12 HSN drop-down. They had also stated that they were facing issues in adding the required HSN details in table -12 and filing of a statement of outward supplies in form GSTR-1 of July 2021. Further, in some JSON files, the HSN field was coming blank from the offline tool. There were some other HSN related errors like-