Statement of Outward Supplies:
As explained above, GSTR-1 is a statement of outward supplies and primarily consists of details of invoices pertaining to outward supplies of the tax payer for the month as provided in section 25 of the draft model bill. To meet the objective of matching of input tax credit, it is essential that all B2B transactions are captured at invoice level. For B2C transactions, since the recipient shall not claim input tax credit, the same can be captured at consolidated level. However, keeping in view the importance of destination-based nature of the tax, it has been mandated that invoice level details of interstate B2C transaction of value above Rs.2.5 lakh shall be captured.
This form would capture the following information:
1. Basic details of the Taxpayer i.e. Name along with GSTIN
2. Period to which the Return pertains
3. Gross Turnover of the Taxpayer in the previous Financial Year. This information would be submitted by the taxpayers only in the first year and will be autopopulated in subsequent years.
4. Final invoice-level supply information pertaining to the tax period separately for goods and services:
i. For all B2B supplies (whether inter-state or intra-state), invoice level specified details will be uploaded.
ii. For all inter-state B2C supplies (including to non-registered Government entities, Consumer / person dealing in exempted / NIL rated / non GST goods or services), the suppliers will upload invoice level details in respect of every invoice whose value is more than Rs. 2,50,000/-. For invoices below this value, summary of supplies made for every State as the place of supply shall be filed. In this context, it is important to note that where address of the recipient is available on record, both in case of goods as well as services, other than a few exceptions, the place of supply is broadly the location of recipient and in all such cases, if the State of place of supply is different from the State where supplier is registered, it has to be treated as inter-state supply. If the address of recipient does not exist on record, the place of supply shall become the state in which the supplier is registered, making it an intra-state supply.
iii. The recommendation of the Committee on IGST and GST on Imports with respect to the details about HSN code for goods and Accounting code for services to be captured in an invoice have been accepted with certain
modifications. The details proposed by this Committee are as follows:-
a. HSN code (4-digit) for Goods and Accounting Codes for Services will be mandatory initially for all taxpayers with turnover in the preceding financial year above Rs. 5 Crore(For the first year of operations of GST,
self-declaration of turnover of previous financial year will be taken as the basis as all India turnover data will not be available in the first year. From the 2nd year onwards, turnover of previous financial year under GST will
be used for satisfying this condition).
b. For taxpayers with turnover between Rs 1.5 Crore and Rs 5 Crore in the preceding financial year, HSN codes may be specified only at 2-digit chapter level as an optional exercise to start with. From second year of GST operations, mentioning 2-digit chapter level HSN Code will be mandatory for all taxpayers with turnover in previous financial year between Rs. 1.5 Crore and Rs. 5.0 Crore.
c. Any taxpayer, irrespective of his turnover, may use HSN code at 6- digit or 8-digit level if he so desires.
d. To start with, compounding dealers may not be required to specify HSN at 2-digit level also.
e. Prescribed Accounting code will be mandatory for those services for which Place of Supply Rules are dependent on nature of services to apply the destination principle, irrespective of turnover.
f. HSN Codes at 8-digit level and Accounting Codes for services will be mandatory in case of exports and imports.
iv. The above parameters with respect to HSN code for goods and Accounting Code for services will apply for submitting the information in return relating to relevant invoice level information for B2B supplies (both intra-state and inter-state) and inter-state B2C supplies (where taxable value per invoice is more than Rs. 2.5 lakhs). It is proposed that in the return form the description of goods and services may not be required to be submitted by the taxpayer as the same will be identified through the submission of HSN code for goods and Accounting Code for services. In order to differentiate between the HSN code and the Service Accounting Code (SAC), the latter will be prefixed with “s”. The taxpayers who have turnover below the limit of Rs. 1.5 Crore will have to mention the description of goods/service, as the case maybe, wherever applicable.
v. For all Intra-State B2C supplies (including to non-registered Government entities, consumer / person dealing in exempted / NIL rated / non GST goods or services), consolidated sales (supply) details will be uploaded. However a
dealer may at his option furnish invoice wise information in respect of exempted and nil rated supplies also.
vi. The supply information will also have details relating to the Place of Supply in order to identify the destination state as per the Place of Supply Rules where it is different from the location of the recipient.
vii. Details relating to supplies attracting Reverse charge will also be submitted
5. Details relating to advance received against a supply to be made in future will be submitted in accordance with clause (2) of sections 12 and 13 of the draft model bill.
6. Details relating to taxes already paid on advance receipts for which invoices are issued in the current tax period will be submitted.
7. Details relating to supplies exported (including deemed exports) both on payment of IGST as well as without payment of IGST would be submitted.
8. There will be a separate table for submitting the details of revisions in relation to the outward supply invoices pertaining to previous tax periods. This will include the details of Credit/Debit Note issued by the suppliers and the differential value impact and the concomitant tax payable or refund/tax credit sought.
9. There will be a separate table for effecting modifications/correcting errors in the returns submitted earlier.
10. There will be a separate table for submitting details in relation to NIL rated, Exempted and Non GST outward supplies to ( both inter-state and intra-state) to registered taxpayers and consumers.
Section 25 (1) of the draft model bill mandates that the statement of outward supplies should be finalized submitted by 10th of the succeeding month to ensure that the statement of inward supplies can be auto populated soon after 10th of the month. The taxpayers can upload the invoice level details on a continuous basis and the same would be visible to even the corresponding purchasing taxpayers.
The GSTN ecosystem provides multiple ways to upload the invoice level details depending on the convenience and the size of tax payer. The most rudimentary route to upload the invoice level details would be the web interface of GST Common Portal. GSTN would also provide a utility to either enter the details offline and upload it in one go or export it from the system of taxpayer and upload it to GSTN servers. Various popular accounting software providers and also in the process of integrating their system with GSTN system to allow direct upload of GSTR-1 from their accounts to GSTN. GSTN is also developing a GST Service Provider (GSP) framework where GSPs can develop their own utilities to perform different functions and register them with GSTN for allowing online operations through their utility directly. All these would ensure that the burden of uploading invoice details is minimized and at the same time sufficiently reduce the possibility of errors creeping in due to data entry mistakes.