GSTR-1 B2B vs B2C Explained - Complete Guide 2026

B2B vs B2C: Basic Definition

Understanding B2B and B2C classifications is crucial for correct GSTR-1 filing and GST compliance.

B2B (Business to Business)

Definition: Supplies made to registered GST taxpayers (businesses that have GSTIN).

Example:

Wholesaler selling to retailer
Manufacturer supplying to distributor
CA providing services to a company
Software vendor billing another business

Key Identifier: Recipient has a 15-digit GSTIN

B2C (Business to Consumer)

Definition: Supplies made to unregistered persons (end consumers without GSTIN).

Example:

Retailer selling to individual consumer
Restaurant billing a customer
Doctor providing services to patient
Online shopping by individual

Key Identifier: Recipient does NOT have GSTIN

B2B Supplies in GSTR-1

What Goes in B2B Section

B2B section includes ALL invoices where: ✅ Buyer has valid GSTIN
✅ Invoice value: Any amount (no limit)
✅ Supply type: Goods or services
✅ Invoice type: Regular, SEZ with/without payment, deemed exports

B2B Invoice Requirements

Every B2B invoice in GSTR-1 must contain:

Field	Requirement
Buyer GSTIN	Mandatory 15-digit GSTIN
Invoice Number	Unique number
Invoice Date	DD-MM-YYYY format
Invoice Value	Total including all taxes
Place of Supply	State code (POS)
Rate	GST rate (5%, 12%, 18%, 28%)
Taxable Value	Value before GST
Tax Amount	IGST or CGST+SGST
HSN/SAC Code	Mandatory (4/6/8 digits based on turnover)
Reverse Charge	Y/N indicator

B2B Tax Calculation

Intra-State Supply (within same state):

Taxable Value: ₹10,000
GST Rate: 18%
CGST (9%): ₹900
SGST (9%): ₹900
Total: ₹11,800

Inter-State Supply (different states):

Taxable Value: ₹10,000
GST Rate: 18%
IGST (18%): ₹1,800
Total: ₹11,800

B2B Section in GSTR-1 JSON

"b2b": [
  {
    "ctin": "29AABCU1332L000",
    "inv": [
      {
        "inum": "INV001",
        "idt": "15-03-2024",
        "val": 11800,
        "pos": "27",
        "rchrg": "N",
        "inv_typ": "R",
        "itms": [
          {
            "num": 1,
            "itm_det": {
              "hsn_sc": "998314",
              "rt": 18,
              "txval": 10000,
              "iamt": 1800,
              "camt": 0,
              "samt": 0
            }
          }
        ]
      }
    ]
  }
]

B2C Supplies in GSTR-1

B2C is divided into TWO categories based on invoice value:

1. B2CL - B2C Large Invoices

Criteria:

Invoice value > ₹2,50,000
Buyer: Unregistered (no GSTIN)
Supply: Inter-state only

Example: A Karnataka company sells machinery worth ₹3,00,000 to an individual in Maharashtra.

Why separate reporting? High-value B2C transactions need detailed tracking for tax compliance.

2. B2CS - B2C Small Invoices

Criteria:

Invoice value ≤ ₹2,50,000
Buyer: Unregistered
Supply: Intra-state OR inter-state

Example: A retail shop’s daily sales to walk-in customers.

Reporting method: Consolidated (summarized) by state and tax rate, not individual invoices.

B2CL (B2C Large) - Detailed Explanation

When to Report in B2CL

✅ Invoice value exceeds ₹2,50,000
✅ Buyer doesn’t have GSTIN
✅ Supply is inter-state

B2CL Invoice Requirements

Similar to B2B, but:

❌ No buyer GSTIN (obviously)
✅ Must mention buyer’s state (Place of Supply)
✅ Only IGST applicable (inter-state)

B2CL JSON Structure

"b2cl": [
  {
    "pos": "27",
    "inv": [
      {
        "inum": "INV501",
        "idt": "20-03-2024",
        "val": 295000,
        "itms": [
          {
            "num": 1,
            "itm_det": {
              "rt": 18,
              "txval": 250000,
              "iamt": 45000
            }
          }
        ]
      }
    ]
  }
]

Note: Only iamt (IGST) is used, never camt or samt.

B2CS (B2C Small) - Detailed Explanation

When to Report in B2CS

✅ Invoice value ≤ ₹2,50,000
✅ Buyer doesn’t have GSTIN
✅ Supply can be intra-state OR inter-state

B2CS Reporting Method

NOT invoice-wise - Reported as consolidated summary:

Grouped by state
Grouped by GST rate
Grouped by supply type (intra/inter)

B2CS JSON Structure

"b2cs": [
  {
    "sply_ty": "INTRA",
    "pos": "29",
    "typ": "OE",
    "rt": 18,
    "txval": 500000,
    "iamt": 0,
    "camt": 45000,
    "samt": 45000
  },
  {
    "sply_ty": "INTER",
    "pos": "27",
    "typ": "OE",
    "rt": 18,
    "txval": 300000,
    "iamt": 54000,
    "camt": 0,
    "samt": 0
  }
]

Fields:

sply_ty: INTRA (same state) or INTER (different state)
pos: Place of supply (state code)
rt: GST rate
txval: Total taxable value for this combination
Tax amounts accordingly

B2B vs B2CL vs B2CS Comparison

Feature	B2B	B2CL	B2CS
Buyer Type	Registered (has GSTIN)	Unregistered	Unregistered
Invoice Value	Any amount	> ₹2,50,000	≤ ₹2,50,000
Supply Type	Intra or Inter state	Inter-state only	Intra or Inter state
Reporting	Invoice-wise	Invoice-wise	Consolidated
Buyer GSTIN	Required	Not applicable	Not applicable
ITC to Buyer	Yes (if eligible)	No	No
HSN Mandatory	Based on turnover	Based on turnover	Not always

Tax Implications of B2B vs B2C

For the Seller (You)

B2B:

Must issue tax invoice
Collect GST from buyer
Buyer can claim ITC (Input Tax Credit)
Detailed reporting in GSTR-1

B2C:

Must issue bill of supply or tax invoice
Collect GST from consumer
Consumer cannot claim ITC
Simplified reporting (B2CS) or detailed (B2CL)

Impact on Pricing

B2B Pricing: Often quoted as “Ex-GST” because buyer can claim ITC

Product cost: ₹10,000
GST 18%: ₹1,800
Total: ₹11,800 (but buyer gets ₹1,800 ITC back)

B2C Pricing: Usually inclusive of GST because consumer bears the cost

MRP: ₹11,800 (inclusive of all taxes)

Common Classification Mistakes

Mistake 1: Reporting B2C in B2B

Wrong: Selling to individual, but reporting in B2B with fake GSTIN
Consequence: Tax notice, penalty
Fix: Report in B2CL or B2CS based on invoice value

Mistake 2: Missing B2CL

Wrong: ₹3 lakh invoice to consumer reported in B2CS
Consequence: Under-reporting, compliance issue
Fix: All inter-state B2C > ₹2.5L must go in B2CL

Mistake 3: Wrong Supply Type in B2CS

Wrong: Inter-state supply marked as INTRA
Consequence: Wrong tax calculation (IGST vs CGST+SGST)
Fix: Verify place of supply before filing

Mistake 4: Consolidated B2B

Wrong: Summarizing multiple B2B invoices as one entry
Consequence: GSTIN mismatch for buyers
Fix: Each B2B invoice must be separate entry

How to Handle Mixed Supplies

Example Scenario

You run an electronics shop:

Sell to another business (GSTIN provided) → B2B
Sell ₹3L worth to an individual in another state → B2CL
Daily retail sales to walk-in customers → B2CS

Proper Classification

Customer Type	Invoice Value	State	Report In
Business with GSTIN	₹50,000	Same state	B2B
Business with GSTIN	₹5,00,000	Other state	B2B
Individual	₹3,00,000	Other state	B2CL
Individual	₹1,50,000	Same state	B2CS
Individual	₹50,000	Other state	B2CS
Walk-in customers	₹10,000/day	Same state	B2CS (consolidated)

Converting GSTR-1 JSON: B2B vs B2C Data

When you convert GSTR-1 JSON to Excel using our tool, you get separate sheets:

B2B Sheet Columns

Customer GSTIN
Customer Name
Invoice Number
Invoice Date
Invoice Value
Taxable Value
IGST/CGST/SGST

B2CL Sheet Columns

Place of Supply
Invoice Number
Invoice Date
Invoice Value
Taxable Value
IGST (only)

B2CS Sheet Columns

Supply Type (INTRA/INTER)
Place of Supply
GST Rate
Total Taxable Value
Tax Amount

Convert GSTR-1 JSON Now →

B2B and B2C in Other GST Returns

GSTR-3B

Table 3.1: B2B, B2CL, B2CS all combined
No separate bifurcation needed
Only total values required

GSTR-2B (Purchase Side)

Buyer sees their purchases in B2B section
B2C purchases don’t appear (no ITC available)

GSTR-9 (Annual Return)

Separate tables for B2B and B2C supplies
Consolidated data from 12 monthly GSTR-1s

Tips for Accurate B2B/B2C Reporting

✅ Always ask for GSTIN - If customer has it, report in B2B
✅ Check invoice value - Above ₹2.5L inter-state B2C goes in B2CL
✅ Verify state code - Crucial for B2CL and inter-state B2CS
✅ Use billing software - Auto-classifies based on GSTIN and value
✅ Reconcile monthly - Match GSTR-1 with sales register
✅ Don’t mix - Keep B2B and B2C invoices clearly separated
✅ Review before filing - Convert JSON to Excel and verify

Frequently Asked Questions

Can a B2C customer become B2B later?

Yes. If an unregistered customer gets GSTIN, future invoices go in B2B. Past invoices remain in B2C.

What if I don’t know buyer’s GSTIN?

If customer doesn’t provide GSTIN, treat as B2C. Cannot claim it’s B2B without valid GSTIN.

Is PAN number enough for B2B?

No. Must have 15-digit GSTIN. PAN alone doesn’t qualify for B2B.

Can I change B2B to B2C after filing?

Yes, through amendment. File revised invoice data in next month’s GSTR-1.

What about exports?

Exports are reported in separate “EXP” section, not B2B even if buyer is a foreign business.

Does B2C include cash sales?

Yes. All sales to unregistered persons, whether cash, card, or UPI, are B2C.

Conclusion

Quick Summary:

B2B = Buyer has GSTIN, any invoice value, detailed reporting
B2CL = Buyer unregistered, invoice > ₹2.5L, inter-state, detailed reporting
B2CS = Buyer unregistered, invoice ≤ ₹2.5L, consolidated reporting

Classification Logic:

Does buyer have GSTIN? → Yes = B2B | No = Go to step 2
Is invoice value > ₹2,50,000? → Yes = Check step 3 | No = B2CS
Is supply inter-state? → Yes = B2CL | No = B2CS

Best Practices:

Always collect GSTIN from business customers
Set billing software to auto-classify
Review GSTR-1 data before filing
Use our converter to verify classification

Convert and Verify Your GSTR-1 Data →

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