Any error occurring during GST return filing online can invite the hassle of reconciliation or penalty payment, which no GST-registered taxpayer ever wants to face.
To cope with the most common GST return filing errors, we have created this blog. Read it till the end to learn from the mistakes that many GST taxpayers make. Know how to avoid those common errors or find a solution if you have already made one.
#1 Error in ITC Claiming
The first and most common mistake in GST return filing is claiming incorrect ITC. Often there are cases of claiming higher ITC than eligibility, which may be due to clerical mistakes or not a clear understanding of rules.
Excess ITC claim cases may lead to failure to offset GST liabilities or even result in scrutiny from the GST department. The penalty can go up to 100% of the ITC amount availed or 10,000 INR, whichever is higher.
How to Avoid
One must double check the ITC claim before filing a return. Only claim ITC on goods or services directly related to taxable business operations and eligible under GST law.
Solution
If the wrongly claimed ITC is not utilised yet, then go for the ITC reversal process. The process is meant to reverse the credit together with interest payable for a specific period.
#2 Errors While Uploading Data Invoice Wise in GSTR-1
Because the GSTR-1 requires the vast amount of data of outward suppliers to be uploaded invoice-wise, the errors while entering the data happen. This results in a mismatch between the GSTR-1 and GSTR-3B.
How to Avoid
One needs to be very careful while uploading the data and re-check once done because there is no provision to amend it.
Solution
If the difference between Form GSTR-1 and GSTR-3B states the shortage of tax paid by the supplier, then it must be reimbursed, including interest.
#3 Not Filing Nil Return
Many GST-registered taxpayers skip filling out a GST return if there is no transaction—that is a big mistake. Because even if your business makes zero transactions in a particular period, you must still file GST. That is called filing a NIL return.
How to Avoid
Hire dedicated tax professionals who take care of GST filing matters so everything happens on time and you don’t incur any late fee fine.
Solution
File the GST Nil return as soon as possible with the applicable fine. Currently the late fee charge for Nil return is ₹20 per day (₹10 CGST + ₹10 SGST), capped at a maximum of ₹500 for each return type (GSTR-1, GSTR-3B).
#4 Disclosure and Payment of Tax Under the Wrong GST Head
Sometimes taxpayers enter the GST liability or input tax credit (ITC) under the wrong head (CGST, SGST, or IGST) while filing returns. This mistake can also happen with payments, where one mistakenly records the tax or interest paid under the incorrect head.
How to Avoid
Double-check each entry, as that will give assurance of the correct head being used for every tax component. And be extra careful during payments, as the GSTN does not allow inter-utilisation of taxes across different heads.
Solution
To correct this mistake, you will have to file Form PMT-09 on the GST portal. With this form, you can transfer wrongly paid amounts to the correct head (CGST, SGST, IGST, or CESS) without penalties.
#5 Not Keeping Up With Amendments and Updates
GST regulations do not always remain the same. The amendments and updates keep on happening, which are necessary to comply with to ensure no issues occur.
How to Avoid
Stay updated about every update from the authorities through notifications on the GST portal or by contacting tax professionals.
Solution
If you haven’t checked the amendment and filed according to outdated rules, then check with tax consultants who can provide you with the right solution and might save you from penalty (if any).
Avoid Mistakes by Hiring Professionals
The GST return filing process is not easy for everyone; it can really be confusing. This is why you must look for professionals who have long years of expertise in GST return filing. Trust Amit V Mittal & Associates, Chartered Accountants (AVM) for correct GST return filing and on time so that you never ever have to face any inconvenience and carry your business operations smoothly.