Summary
From May 2025, a key GST rule mandates separate reporting of B2B and B2C sales in GSTR-1. Exports are now strictly classified under B2C. This change aims to streamline HSN-wise data validation and reduce mismatches in GST returns.
Major GST Rule Change from May 2025 Separate Reporting for B2B and B2C
Starting May 2025, the CBIC has introduced a significant GST rule change that affects how businesses report their sales in GSTR-1. All taxpayers must now clearly bifurcate B2B and B2C transactions when entering HSN summary details. This impacts exporters, suppliers, and e-commerce operators directly.
This update comes via GSTN advisory dated 30th April 2025, aligning GSTR-1 filing with backend validations and system improvements.
Why This Change Matters
- Reduces errors in Input Tax Credit (ITC) claims
- Helps CBIC match invoice data for faster scrutiny
- Clarifies classification for exports, deemed exports, and e-commerce
- Supports automation and AI-based compliance systems
What the New Rule Says
Exports are now classified as B2C, even when made to registered foreign buyers.
Table: B2B vs B2C HSN Code Reporting
| Type of Sale | Table in GSTR-1 | Classified As |
|---|---|---|
| Regular B2B Invoice | 4A, 4B, 6B, 6C | B2B |
| Exports with LUT/IGST | 6A | B2C |
| Supplies to SEZ | 6B | B2B |
| B2C (Unregistered) | 7A, 7B, 8 | B2C |
| E-commerce Exports | 9A (Export) | B2C |
Compliance Checklist for Businesses
✅ Separate your sales registers for B2B and B2C
✅ Verify export invoices are shown under B2C (Table 6A)
✅ Update ERP/software to align with new validations
✅ Avoid reporting exports in B2B sections like 6B or 6C
Legal Reference
🔹 CBIC Advisory dated 30.04.2025 on GSTR-1 HSN validation
🔹 Section 37 of CGST Act, 2017 – Outlines return filing obligations
🔹 Rule 59 of CGST Rules – Covers GSTR-1 content and structure
Expert Insight: Avoid Common Mistakes
“Many exporters still mistakenly report exports under B2B due to older filing habits. This leads to validation errors and delays in refunds. Businesses must realign their reporting formats ASAP.”
— CA Mehul Shah, Indirect Tax Consultant
FAQs
Q1: Are exports always considered B2C under GST?
Yes. Under the revised advisory, exports (Table 6A) are to be shown as B2C for HSN summary purposes, even if the recipient is registered overseas.
Q2: Will there be penalties for incorrect classification?
Incorrect HSN mapping may lead to validation failures, notices, or refund delays. While there’s no direct penalty now, repeated errors can invite scrutiny.
Q3: Do I need to revise previous GSTR-1s?
No retrospective changes are required, but ensure correct classification from May 2025 onwards.
Final Word
Accurate bifurcation between B2B and B2C in HSN summaries will help taxpayers avoid mismatches, accelerate refunds, and stay compliant.