GST Treatment and Reporting of Share & Mutual Fund Trading Transactions in GSTR-1

Sale transactions of shares and mutual fund units are outside the scope of GST (neither goods nor services) and do not need to be reported in GSTR-1 as Exempt or Non-GST supplies. Omitting them from FY 2025-26 GSTR-1 was legally correct, so no amendment is required in the October 2026 GSTR-1. However, 1% of the total sale value of securities must be treated as exempt turnover solely for calculating common ITC reversals under Rule 42/43 in GSTR-3B and GSTR-9.

Please provide me with the GST website link or reference where I can verify this. Our Income Tax Auditor has advised me that I need to show this under “Exempted Sales” in GSTR-9.

Both views can be right, they answer different questions.

Sale of shares and mutual fund units is not a supply of goods or services (securities are carved out of both definitions), so there is nothing to report in GSTR-1 for FY 2025-26, and no need to amend or add it in the October 2026 return. Reporting it as Exempt in GSTR-1 would actually overstate your exempt supplies.

Where your auditor's point probably comes from: securities sales still matter for the ITC reversal. Under Section 17(3) and the Explanation at the end of Rule 45, the value of securities is taken at 1% of the sale value when you work out exempt turnover (E) for common credit under Rule 42/43. So the check is:
- Did you have common input credit (rent, software, audit fees) in FY 2025-26?
- Was 1% of the securities sale value included in E when you reversed credit in GSTR-3B and worked out the annual Rule 42 true-up?
If not, the fix is a DRC-03 payment (with interest under Section 50 if credit was wrongly used), not an amended GSTR-1.

In GSTR-9, the securities value does not belong in the exempted or nil-rated rows of Table 5. Please confirm the right row from the GSTR-9 instructions on gst.gov.in with your auditor. The rate and valuation rule are in Rule 43/45 of the CGST Rules 2017.

This [ITC reversal guide for Rule 42 and 43](https://taxgarden.in/blog/itc-reversal-rule-42-43-common-credit-capital-goods-gst-india-2026) has a worked example of the 1% securities valuation in E.