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Top 10 Common Mistakes to Avoid in GST Return Filing


Top 10 Common Mistakes to Avoid in GST Return Filing

Neglecting to Report All Sales Transactions

Failure to report all sales transactions in GST returns is a significant filing error. This oversight can lead to inaccurate tax reporting, potential audits, fines, and legal repercussions. Properly documenting and reporting all sales is crucial for maintaining compliance with tax regulations and ensuring the accuracy of financial records.

Misclassification of Goods or Services

Misclassification of goods or services in GST returns is a common mistake, often leading to incorrect tax calculations and compliance issues. Proper classification is crucial for accurate reporting, payment of taxes, ensuring compliance with tax regulations and avoiding penalties. To prevent such errors, businesses should carefully review and understand the applicable GST codes for their transactions and seek professional guidance if needed.

Errors in Calculating Output Tax Liability

Errors in calculating output tax liability can lead to discrepancies in GST returns. These mistakes may involve incorrect tax rates, miscalculated invoice values, or failure to include eligible credits. Such errors could result in overpayment or underreporting of taxes, potentially leading to penalties and audits. It’s crucial to ensure accurate calculations and diligent record-keeping to avoid these pitfalls in GST return filing.

Inaccurate Input Tax Credit (ITC) Claims

Missing or Incorrect Details of Input Tax

Missing or incorrect input tax details are common mistakes made during the filing of GST returns. These errors can lead to discrepancies in tax calculations and potential legal issues. It’s crucial to accurately record and report input tax credits 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.

Non-Compliance with ITC Eligibility Criteria

Failing to meet ITC eligibility criteria constitutes a common error in GST return submission. Such non-compliance can result from inadequate documentation, misinterpretation of rules, or oversight. These mistakes hinder rightful Input Tax Credit claims, impacting accurate tax reporting and potential financial benefits. Vigilance in adhering to eligibility requirements is crucial for seamless GST compliance and optimal tax utilization.

Failure to Reconcile ITC with GSTR-2A

Reconciling ITC with GSTR-2A in GST filing involves comparing the Input Tax Credit claimed by a taxpayer in their GST return with the details of eligible input tax available as per the GSTR-2A, which is the auto-generated purchase return. This process ensures that the claimed ITC aligns with the invoices uploaded by suppliers, enhancing accuracy and compliance in GST reporting.

Failing to reconcile Input Tax Credit (ITC) with GSTR-2A constitutes a mistake in GST return filing. Proper reconciliation is crucial to ensure accurate reporting and compliance with GST regulations.

Late or Missed Filing

Consequences of Delayed GST Return Filing

Delayed GST return filing in India can lead to various consequences. These include:

  1. Penalties and Interest:

Late filing can attract penalties and interest charges, increasing the financial burden on the taxpayer.

  1. Loss of Input Tax Credit:

Input Tax Credit (ITC) may be disallowed for delayed filing, affecting the taxpayer’s ability to offset tax liabilities.

  1. Non-Compliance Issues:

Repeated delays can result in non-compliance notices and potential legal actions.

  1. Business Disruption:

Non-filing can disrupt business operations and result in difficulties in obtaining GST compliance certificates.

  1. Negative Impact on Reputation:

Consistent delays can harm a business’s reputation and credibility.

Remembering the Filing Due Dates

Remembering GST filing due dates is crucial for compliance.

  • Monthly GSTR-3B returns are due by the 20th of the following month, while
  • GSTR-1, reflecting outward supplies, is due on the 11th or 13th (based on turnover) of the next month,
  • GSTR-9, an annual return, is due by December 31st.

Timely submission avoids penalties and ensures smooth business operations.

Setting Up Reminders and Alerts

Setting up reminders and alerts is essential to ensure timely filing of GST returns. Here’s how to do it:

  1. Calendar Alerts – digital calendar (Google Calendar, Outlook, etc.) to set up recurring reminders for different GST filing due dates.
  2. Mobile Apps offering filing due date alerts and notifications.
  3. Email Reminders
  4. Accounting Software
  5. Third-Party Services
  6. SMS Notifications
  7. Internal Processes
  8. Posters/Notices.

Incomplete or Incorrect Invoice Details

Ensuring Proper Invoice Format and Information

To ensure accurate GST return filing, maintain proper invoice format with essential details: supplier & recipient names, addresses, GSTINs, invoice number, date, description, quantity, value, tax rates, and amounts. Validate invoices to avoid errors and ensure compliance.

Matching Invoice Details with GST Returns

Before filing GST returns, meticulously match invoice details with the returns. Verify supplier and recipient GSTINs, invoice numbers, dates, product descriptions, quantities, tax rates, and values. Address any discrepancies promptly to ensure accurate reporting and compliance with GST regulations.

Rectifying Errors in Invoices

Prior to filing GST returns, promptly rectify any errors in invoices. Correct inaccuracies in supplier and recipient details, invoice numbers, tax rates, and values. Timely corrections ensure accurate and compliant GST reporting

Failure to Report Nil Returns

Importance of Filing Nil Returns

Filing nil GST returns is crucial for compliance even when no transactions occur. It signifies active monitoring and adherence to tax obligations. Consistent nil filings establish a clean compliance record, prevent penalties, and maintain credibility with tax authorities. It also avoids unnecessary follow-ups, ensuring smooth business operations and fostering a transparent financial ecosystem.

Penalties for Non-Filing or Late Filing

Non-filing or late filing of GST returns can lead to penalties. For GSTR-3B, it’s ₹50 per day of delay.

For GSTR-1, it’s ₹100 per day (CGST + SGST, total ₹200/day). The maximum penalty is 0.25% of turnover. Moreover, non-compliance may result in disallowed input tax credit and legal actions.

Steps to File Nil Return

To file a nil GST return:

  1. Log in to the GST portal.
  2. Navigate to ‘Returns Dashboard.’
  3. Select the applicable return (GSTR-3B or GSTR-1).
  4. Declare your GSTIN and the tax period.
  5. Confirm the declaration.
  6. If no transactions occurred, enter ‘0’ in relevant fields or ‘Nil’ return option.
  7. Verify details and submit via DSC or EVC.
  8. A success message will confirm filing.
  9. Save the ARN for reference.
  10. Maintain a record of filed returns for compliance documentation.

Overlooking HSN and SAC Codes

Importance of Correct HSN and SAC Codes

Accurate HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code) codes are essential for proper GST return filing. They ensure correct classification of goods/services, accurate tax calculation, and compliance with GST regulations, minimizing errors and potential penalties.

Finding the Right Codes for Products or Services

When filing GST returns, finding the correct HSN (Harmonized System of Nomenclature) or SAC (Services Accounting Code) codes for products or services is crucial. Utilize official resources such as GST portal, HSN/SAC code lists, or consult experts if needed. Accurate coding ensures proper tax categorization and compliance with GST regulations.

Impact on Taxation and Compliance

Selecting incorrect HSN (Harmonized System of Nomenclature) or SAC (Services Accounting Code) while filing GST returns can have significant consequences. It may lead to inaccurate tax calculation, potential overpayment or underpayment, and non-compliance. Tax authorities may impose penalties for incorrect reporting. Accurate coding is essential for proper tax assessment, transparent financial reporting, and maintaining smooth GST compliance.

Ignoring Amendments and Revisions

Importance of Timely Amendments

Timely amendments of GST returns are crucial to rectify errors or omissions. They ensure accurate reporting, prevent potential penalties, and maintain compliance. Swift corrections avoid complications that could arise from incorrect data. Timely amendments also uphold transparency and credibility with tax authorities, ensuring that the business’s financial records accurately reflect its transactions and tax liabilities.

Correcting Mistakes in Previous Returns

Correcting mistakes in previous GST returns involves filing an amendment return. Log in to the GST portal, choose the applicable return form, make necessary changes, and submit the amended return. Rectifying errors promptly ensures accurate reporting and compliance. Keep track of the amendment process and maintain updated records for a transparent and error-free GST filing history.

Procedures for Making Amendments

To make amendments in GST returns, follow these steps:

  1. Log in to the GST portal.
  2. Go to ‘Services’ > ‘Returns’ > ‘Returns Dashboard.’
  3. Select the relevant return form to amend.
  4. Click on ‘Amendment of Invoice Details’ or ‘Amendment of Non-GST Details’ as needed.
  5. Make necessary changes and additions.
  6. Save the changes and submit the amendment return.
  7. Verify via DSC or EVC.
  8. Note the ARN for reference.
  9. Maintain updated records of the amendment for compliance documentation.


The Consequences of Mistakes in GST Return Filing

Mistakes in GST return filing can lead to penalties, loss of input tax credit, non-compliance notices, legal actions, and business disruptions. Correct and accurate filing is essential to avoid these consequences and maintain a transparent financial record.

Tips for Ensuring Accurate and Timely Filing

Ensure accurate and timely GST return filing with these tips:

  • Maintain organized records of transactions and invoices.
  • Set up reminders for filing due dates.
  • Validate HSN/SAC codes for correct tax categorization.
  • Reconcile ITC with GSTR-2A.
  • Review and amend returns promptly if needed.
  • Get a professional assistance from experts like Kanakkupillai!!

For hassle-free GST filing, connect with Kanakkupillai. Their experts ensure error-free and compliant GST returns.

Visit Kanakkupillai or connect with us at 7305 345 345 for professional assistance. Your smooth GST compliance starts here!

FAQs on GST Return Filing

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