Article on B2C (Large) invoices and their reporting in GST returns

B2C (Large) invoices and their reporting in GST returns

There can be two types of transactions, one is Business to Business (B2B) and another is Business to Customer (B2C). In B2B transactions both the supplier and recipient are registered persons. However, in the case of B2C transactions the supplier is a registered person but the recipient is an unregistered person. Further, B2C transactions can be divided into two parts i.e., B2C large and B2C small. In this article we will discuss when the B2C transactions are considered as B2C large and when these are to be considered as B2C small. Further, we will discuss the reporting requirement of B2C supplies in GST returns.

B2C invoices are invoices raised for sales to end-consumers. The businesses with a turnover exceeding Rs. 500 crore must include a dynamic QR code on these invoices. Further, the GST Council in its 54th meeting made the recommendations for rolling out a pilot for B2C e-invoicing, following the successful implementation of e-invoicing in the B2B sector. The Council recognized potential benefits of e-invoicing in retail, such as improved business efficiency, environmentally friendly, cost efficiency to the business, etc. It would also provide an opportunity to the retail customers to verify the reporting of the invoice in the GST return. The pilot will be rolled out on a voluntary basis in selected Sectors and States.

What is a B2C Large Supply?

The term B2C Large is used for inter-state transactions where goods are sold from a business to a consumer and the transaction value exceeds a certain threshold i.e., Rs. 1,00,000/- earlier this threshold limit was Rs. 2,50,000/-. However, vide Notification No.12/2024 Central Tax the said threshold limit was reduced to Rs.1,00,000/- with effect from 1st day of August, 2024.

What is a B2C small supply?

The B2C small GST invoice (Business to Consumer, Small) is specifically designed for transactions that do not exceed a specific monetary threshold i.e., Rs. 1,00,000/- and are conducted within the same state Sub rule 4 of rule 59 of CGST Rules 2017 states that the details of outward supplies of goods or services or both furnished in GSTR-1 shall include the-

(a) invoice wise details of all -

(i) inter-state and intra-state supplies made to the registered persons; and

(ii) inter-state supplies with invoice value more than one lakh rupees made to the unregistered persons;

(b) consolidated details of all -

(i) intra-state supplies made to unregistered persons for each rate of tax and

(ii) State wise inter-state supplies with invoice value upto one lakh rupees made to unregistered persons for each rate of tax;

Earlier this threshold limit mentioned in rule 59(4) was Rs. 2,50,000/-. However, vide Notification No.12/2024 Central Tax the said threshold limit was reduced to Rs.1,00,000/- with effect from 1st day of August, 2024.

Impact of the amendment in this threshold limit:

In GSTR 1, taxable supplies to unregistered customers (B2C) are to be reported in a separate table. In such cases, supplies having a value of more than 2.5 Lakhs are to be reported invoice-wise and state-wise in the GSTR-1. The remaining entries are to be combined and entered as a whole in the B2C table.

Now, this limit of 2.5 Lakhs is reduced to 1 lakh rupees. It means now all B2C entries having a value of more than 1 lakh are to be entered invoice-wise and state-wise in the GSTR-1 as B2C Large. This amendment increases the compliance for the supplier as more entries are to be shown invoice-wise.

Advisory on reporting of B2C supplies in GSTR-1:

For providing the clarity among the taxpayers regarding the reporting of supplies made to un-registered persons, an advisory was issued on GST Portal on 03.09.2024 wherein it was mentioned that although the threshold limit of B2C large supplies has been reduced from 2.5 Lakh to 1 Lakh. However, this change is currently under development on the portal and will be available to the taxpayers shortly. Till the time the functionality is made available on the portal, it is advised to continue reporting the invoice-wise details of taxable outward supplies to unregistered dealers which are more than 2.5 Lakhs as B2C large in Form GSTR-1.

Respective tables of GSTR-1 for Reporting B2C Supplies:

● Table 5 of GSTR-1:
Taxable outward inter-state supplies to unregistered persons, in other words, B2C supplies, where the invoice value is more than Rs.1 lakh i.e., B2C Large. Invoice-wise details of all supplies made to unregistered dealers are to be mentioned here.

● Table 5A of GSTR-1:
In this table B2C invoices i.e. sale to unregistered dealers along with the supplies made through e-commerce operators are required to be reported rate-wise.

● Table 7 of GSTR-1:
This section contains a rate wise summary of all B2C sales made during the month/quarter where invoice value is less than Rs.1 lakhs i.e., B2C small supplies.

● Table 7A of GSTR-1:
All intrastate B2C sales, including sales made through e-commerce operators, have to be mentioned here, categorised as per the GST rates.

● Table 7B.of GSTR-1:
All interstate B2C sales, along with place of supply i.e. name of state where invoice value is up to Rs 1 lakhs should be specified here, including sales made through e-commerce operators.

Compulsory mention of the details of B2C inter state supplies in table 3.2 of FORM GSTR-3B.

In GSTR-3B there is a table 3.2 in which the B2C interstate supplies are to be shown. However, some taxpayers do not report any amount in this table because they think that the same is already reported by them in table 3.1 (a) of GSTR-3B. However it is important to know that such reporting of inter state B2C supplies in table 3.2 is compulsory. The same was also clarified by CBIC in Circular No. 89/08/2019 wherein it was clarified that the apportionment of IGST collected on inter state supplies made to unregistered persons in the state where such supply takes place is based on the information reported in Table 3.2 of GSTR-3B by the registered person. As such, non-mentioning of the said information results in;

(i) non-apportionment of the due amount of IGST to the State where such supply takes place; and

(ii) a mis-match in the quantum of goods or services or both actually supplied in a state and the amount of IGST apportioned between the centre and that state.

Accordingly, it is instructed that the registered persons making inter-state supplies to unregistered persons shall report the details of such supplies along with the place of supply in Table 3.2 of GSTR-3B and Table 7B of GSTR-1 as mandated by the law..

Penalty for not reporting:
In the said circular it was also mentioned that the penalty u/s 125 i.e., Rs. 25,000 under each act, would be levied in case of non reporting the said supplies in table 3.2 of GSTR-3B and table 7B of GSTR-1.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.