10 Common Mistakes to Avoid When Filing GST Returns

Introduction

The Goods and Services Tax (GST) is a value-added tax (VAT) that was introduced in India on July 1, 2017. It is a comprehensive tax levied on the supply of goods and services across the country. GST is a single tax that has replaced multiple indirect taxes, such as excise duty, service tax, and VAT.

GST returns are required to be filed by all registered taxpayers on a regular basis. Filing GST returns can be a complex task, and many taxpayers make mistakes while filing their returns. These mistakes can lead to penalties and interest charges.

In this article, we will discuss 10 common mistakes to avoid when filing GST returns:



1. Late or missed filing of returns

One of the most common mistakes made by taxpayers is late or missed filing of returns. Filing GST returns on time is mandatory for all registered taxpayers. Late filing of returns can lead to penalties and interest charges.

2. Incomplete or incorrect invoice details

Another common mistake made by taxpayers is entering incomplete or incorrect invoice details in their returns. This can lead to discrepancies in tax calculations and potential legal issues. It is crucial to accurately record and report invoice details to ensure compliance with GST regulations and avoid penalties. Regular reconciliation and thorough review of invoices and documentation can help prevent these errors and ensure accurate GST return filing.

3. Failure to report nil returns

Even if there are no sales or purchases in a particular month, taxpayers are required to file a nil return. Failure to file a nil return can lead to penalties.

4. Inaccurate input tax credit (ITC) claims

Input tax credit is a key feature of GST that allows taxpayers to offset the GST paid on inputs against the GST payable on outputs. It is important to calculate and claim ITC accurately. Inaccurate ITC claims can lead to penalties.

5. Mismatch between GSTR-1 and GSTR-3B returns

GSTR-1 is a detailed return that contains invoice-wise details of outward supplies. GSTR-3B is a summary return that contains a summary of outward and inward supplies. It is important to ensure that GSTR-1 and GSTR-3B returns are reconciled before filing. A mismatch between these two returns can lead to penalties.

6. Incorrect entry of HSN and SAC codes

HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code) are used to classify goods and services for the purpose of GST. It is important to enter the correct HSN and SAC codes in the GST returns. Incorrect entry of these codes can lead to penalties.

7. Ignoring amendments and revisions

If a taxpayer needs to make any changes to their GST returns, they can do so by filing an amendment or revision. It is important to file amendments and revisions on time to avoid penalties.

8. Non-payment of reverse charge mechanism (RCM) liability

In some cases, the liability to pay GST is on the recipient of goods or services instead of the supplier. This is known as the reverse charge mechanism (RCM). Taxpayers who are liable to pay RCM must do so on time to avoid penalties.

9. Failure to maintain proper records

Taxpayers are required to maintain proper records of their business transactions for GST purposes. These records must be maintained for at least 36 months after the end of the financial year. Failure to maintain proper records can lead to penalties.

10. Not taking professional help

If taxpayers are not sure about how to file their GST returns, they should seek professional help from a chartered accountant or other qualified tax advisor. This can help to avoid mistakes and ensure compliance with GST regulations.

Conclusion

By avoiding the common mistakes listed above, taxpayers can ensure that their GST returns are filed accurately and on time. This will help them to avoid penalties and interest charges.

If you need help with GST registration or GST return filing, you can contact TaxFillingIndia in Hyderabad.

Call Us on +91 9177706025 (or) Visit Our website - www.taxfillingindia.com

Comments

  1. TaxSpannerMay 10, 2024 at 3:07 AM

    The value of having a good GST compliance rating, how important it is to businesses, and its implications. You can also check out about GST Compliance Services here.

    ReplyDelete

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