Common Mistakes To Avoid While Filing GST Returns

The foundation of India's tax system is the Goods and Services Tax (GST), which streamlines the tax payment process for businesses. Nevertheless, it can be difficult to navigate the GST landscape, and even seasoned professionals can make blunders while filling.

A number of beneficial regulations and reliefs, like the composition scheme for small businesses, have also been introduced by the GST System. The taxpayer will not be able to amend their GST returns until the subsequent filing of a particular GST return is filed incorrectly. The taxpayer will get a notification and possibly even penalties in the interim.

Therefore, it becomes essential for businesses to file appropriate taxes and comply with the GST System with the assistance of the best GST filing software, not just for compliance's sake but also for the businesses.

Typical Errors To Avoid In GST Return Filing

1. Errors in Manual Data Entry:

One of the most frequent GST filing faults and the one that should basically be avoided are manual data entry errors. The taxpayer is responsible for making sure all information is submitted accurately and in the appropriate format, including supply address, counterparty GSTINs, invoice values and format, non-repetition of invoice numbers, and date format. The taxpayer must utilize the special characters carefully and only when necessary.

2. Falsely Requesting an Input Tax Credit

In the auto-created GSTR-2A return, the supplier reports the registered purchases and related input tax credits made by the taxpayer. On the other hand, each taxpayer's input tax credit must be disclosed separately when filing forms. They should also ensure that the appropriate amount of input tax credit is submitted and guaranteed. In the unlikely event that a higher value is declared, there is a chance to change the return; the difference, plus interest, should be paid in the next month's return.

3. Non-filing of the NIL Returns:

Taxpayers typically believe they are exempt from filing their GST Returns if they have no transactions during the applicable tax period. It's incorrect to say that companies don't need to file a nil return if there are no transactions. To avoid these typical GST errors, pay closer attention.

4. Not paying for the Reverse Charge Mechanism (RCM) & Under the Incorrect GST Head:

For goods and services that recipients must pay RCM, the government has outlined them. Should the reverse charge tax remain unpaid. If the input tax credit is lost and there are further interest payments, there are several GST heads, including IGST, CGST, and SGST. The taxpayer may run into conflict of the law if they pay taxes under the incorrect GST Head. Only the CGST head may be used to pay the CGST.

5. ITC Reversal & Credit Blockage:

In accordance with the numerous ITC law revisions, the ITC will be reversed in the following circumstances: ITC on items used for personal use, lost or damaged goods, failure to pay the supplier within 180 days, capital goods supplied, & samples, etc. Furthermore, the Credit cannot be used for a few certain things. When submitting GST and claiming ITC, taxpayers must be aware of the ITC laws to prevent errors.

6. Ignoring the GSTR 3B and GSTR 1 Reconciliation

If a person who is registered with the GSTR doesn't consistently match his GSTR 3B and GSTR 1 returns, he is making serious mistakes. Everyone should confirm that their GSTR 3B and GSTR 1 reports match regularly before filing GST returns. For example, if someone declares transactions totaling Rs. 2 crore in their GST return for the entire month of May 2020 and transactions totaling Rs. 2.50 crore in their GSTR 1 for the same month, they may face unnecessary prosecution from the GST office.

Conclusion:

It is recommended that taxpayers take their time, file proper GST returns, monitor their business's progress precisely, and adhere to the GST system in order to avoid notices, scrutiny, late fees, fines, and penalties.

Using APIs and billing system integrations with software solution providers like Ankpal, proper GSTR filings may be completed. If an enrolled person files a GST return incorrectly, they may be subject to a significant penalty and interest. Due to the current GST system, GST taxpayers are no longer able to edit their returns and avoid making mistakes when filling them out. Hence, getting hands on the best GST return filing software can be a total game changer in the filing returns process.