Major Changes in GST Return Filing: What You Must Know About GSTR-1 and GSTR-3B (Effective July 2025)

With the dynamic nature of GST compliance in India, the Government continues to introduce regulatory changes to streamline return filing and reduce manual intervention. Two of the most widely filed GST returns—GSTR-1 and GSTR-3B—are now set to undergo significant revisions starting July 2025. These changes aim to improve reporting accuracy, ensure proper tax liability reflection, and prevent discrepancies between outward supplies and tax payments.

Here’s everything taxpayers and businesses need to know about the upcoming amendments and how they can prepare for a smooth transition.

GSTR-3B to Become Non-Editable from July 2025

One of the most critical updates is that auto-populated liabilities in GSTR-3B will become non-editable. Currently, taxpayers have the flexibility to adjust or overwrite auto-filled data in GSTR-3B, even if the details pulled from GSTR-1 or the Invoice Furnishing Facility (IFF) are inaccurate.

However, from July 2025 onwards, this flexibility will be removed. Once GSTR-1 or IFF is filed, the tax liability details that auto-populate in GSTR-3B will be locked and unchangeable. This change is expected to increase data accuracy, but also places a greater responsibility on taxpayers to ensure their GSTR-1 filings are flawless.

Introduction of GSTR-1A: A Solution for Corrections

To address possible errors in GSTR-1 or IFF, the GST Council has introduced GSTR-1A, a corrective return designed to offer a one-time rectification window before GSTR-3B is submitted.

Taxpayers can use GSTR-1A to amend or add invoices after filing GSTR-1 but before submitting GSTR-3B for the same tax period. These changes will then be auto-reflected in GSTR-3B, eliminating the risk of tax mismatch. However, if the GSTR-3B is submitted without these corrections, the window to fix errors for that period closes, and any amendments would need to be carried forward to subsequent returns, possibly inviting interest or penalties.

HSN Code Rules Revised in GSTR-1

In addition to GSTR-3B updates, GSTR-1 will also see changes, particularly concerning Table 12, which deals with HSN-wise summary of outward supplies. From May 2025, Table 12 will be split into two distinct sections:

1. B2B (Business-to-Business) Supplies

2. B2C (Business-to-Consumer) Supplies

This separation ensures better visibility in supply reporting and helps the authorities track large and small transactions more effectively.

Furthermore, the rules regarding HSN code reporting have been updated:

1. For B2B supplies, entering the HSN code remains mandatory for all taxpayers, regardless of turnover.

2. For B2C supplies, businesses with a turnover of less than ₹5 crore in the previous financial year are exempt from mandatory HSN code entry. They may either leave it blank or enter it optionally.

This relaxation aims to reduce compliance burden for smaller businesses, while still maintaining reporting rigour for large enterprises.

Implications for Businesses and Tax Professionals

These changes signal a clear shift towards automation, accountability, and accuracy in GST return filing. Businesses need to revise their internal compliance processes to adapt to the new workflow, especially in the following ways:

1. Double-check invoice data before filing GSTR-1 to ensure there are no mistakes that could carry forward into GSTR-3B.

2. Use GSTR-1A as a mandatory checkpoint if any discrepancies are discovered after filing GSTR-1.

3. Avoid late filings of GSTR-3B without reviewing whether all data from GSTR-1A (if filed) has been correctly reflected.

4. Classify transactions properly under B2B or B2C while entering HSN details in GSTR-1.

5. Train staff or accounting teams to stay updated with these compliance revisions.

With the non-editable nature of GSTR-3B, post-filing corrections will no longer be a casual process. Businesses will need to treat GSTR-1, GSTR-1A, and GSTR-3B as part of a single, tightly integrated workflow, not standalone forms.

Final Thoughts: Compliance is in the Details

The automation adjustments being made to GSTR-1 and GSTR-3B aim to reduce manual work when submitting GST returns. However, as with any form of automation, there is a greater burden to ensure that the data fed into the system is accurate, timely, and precise. The introduction of GSTR-1A by the government for dealing with last-minute changes is a positive step, but it has its cons. Taxpayers must complete this process or else they will be stuck reporting inaccurate liabilities, which would lead to interest or penalties.

FAQs

1. What is the major change in GSTR-3B from July 2025?

Starting July 2025, the auto-generated liability in GSTR-3B will be non-editable. Taxpayers will no longer have the ability to freely edit the outward supply values fetched from GSTR-1 or IFF. Any inconsistencies need to be resolved before filing GSTR-3B.

2. How can I rectify errors in GSTR-1 or IFF after filing them?

Any errors can be rectified by filing GSTR-1A, a new form created for making changes or supplements post GSTR-1 submission and pre GSTR-3B filing for the relevant period. Adjustments made in GSTR-1A will flow into the final auto-populated GSTR-3B.

3. What is GSTR-1A, and when should it be filed?

GSTR-1A acts as a correction form for amending outward supply details reported in GSTR-1. It needs to be filed after submitting GSTR-1 but before GSTR-3B for the same month is submitted, so that the corrections are adequately captured in GSTR-3B.