The Government of India recently updated the reporting rules for inter-state taxable supplies to unregistered dealers. Notification No. 12/2024 – Central Tax, dated July 10, 2024, reduces the threshold limit for reporting these supplies. Businesses now need to report invoice-wise details for transactions above ₹1 lakh, instead of the previous limit of ₹2.5 lakh. These changes apply to Table 5 of Form GSTR-1 and Table 6 of GSTR-5.
This change affects all businesses involved in inter-state transactions with unregistered dealers. It aims to improve compliance and transparency under the GST framework. Here is a breakdown of the notification and its implications.
Key Changes in the Notification No. 12/2024 – Central Tax
The new rules require businesses to report all inter-state taxable outward supplies to unregistered dealers if the invoice amount exceeds ₹1 lakh. This threshold was previously set at ₹2.5 lakh. The change is intended to increase transparency and ensure accurate GST reporting.
Details need to be reported in:
- Table 5 of Form GSTR-1: For inter-state supplies made to unregistered persons.
- Table 6 of GSTR-5: For non-resident taxable persons who file GSTR-5 for their supplies.
Implementation Timeline
The GST portal is updating its system to reflect this new threshold. However, until the portal completes these updates, businesses should continue reporting supplies exceeding ₹2.5 lakh in Table 5 of Form GSTR-1 and Table 6 of GSTR-5.
Steps for Taxpayers to Follow
Taxpayers should consider the following steps until the new functionality is live:
- Continue with Current Reporting Practices: For now, report supplies above ₹2.5 lakh as before.
- Stay Alert for Updates: Regularly check the GST portal for any updates on the new functionality.
- Prepare for the New Threshold: Start identifying inter-state supplies above ₹1 lakh to unregistered dealers to ensure smooth reporting once the portal updates.
- Consult a Tax Expert: If you need clarification, speak to a tax advisor to avoid compliance issues.
Importance of This Change
Lowering the threshold to ₹1 lakh means more transactions require detailed reporting. This will help reduce tax evasion and improve the tracking of transactions. For businesses, it means stricter compliance requirements, but it also results in a more accurate system for tax reconciliation.
Conclusion
The reduction of the threshold for reporting inter-state supplies to unregistered dealers is an essential step for better GST compliance. Taxpayers must stay informed and adjust their practices accordingly. Once the portal updates its functionality, be ready to report under the new threshold to avoid penalties or issues.
For more information please refer below advisory link:
https://www.gst.gov.in/newsandupdates/read/518
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