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Top GST Return Filing Errors Enterprises Make and How to Fix Them
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Avoid making filing mistakes by reconciling your returns regularly. Use reliable GST filing software and set reminders for filing deadlines. You can even train your staff on the GST rules. Since these rules keep on changing, your staff will always need to know about them.
If your returns are filed inaccurately, then it could lead to audits and penalties. It could also affect your credibility with the stakeholders and hamper your business growth. So, it's better to comply with the rules and regulations from the get-go and avoid making any errors at all times.
Yes, you can correct the errors made in outward supplies under the amendment section. But this applies only to GSTR-1. If you made errors in GSTR-3B, then you can make the adjustments for your errors in future filings. You can do so by offsetting the tax liability.
At the same time, corrections are allowed only till a certain time. So you will have to take quick action once you catch the error made in your filing.
Claim your ITC by having a valid debit note or tax invoice. Your supplier should have filed their GSTR-1, and the invoice must reflect in the GSTR-2B. You should also pay your supplier within 180 days of the invoice date.
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Filing accurate GST returns is one of the most significant and crucial responsibilities for enterprises. Not filing it can lead to a myriad of issues, including penalties and interests. But, filing the return itself is not enough. You also need to make it error-free.
Let us find out what these filing errors are. Being aware of them will ensure that you do not make them while filing your GST returns. At the same time, you can also take a look at how you can fix these errors and ensure that they do not happen again.
GST Return Filing Errors and Their Solutions
Here are some of the primary and most common errors made by enterprises, and this is how you can fix them as well.
1. Late Filing
Many enterprises can make the mistake of filing their returns late. It could be due to the lack of awareness about deadlines, or they rely a lot on manual reminders. Instead, use software that has automated reminders. That way, you can file your returns promptly, even if no business has been conducted.
2. Incorrect GSTIN
Sometimes, there can be a manual error when copy-pasting or filling in data. If enterprises fill in incorrect GSTINs then they will need validation tools to verify it. Implement software that has bulk upload features and built-in GSTIN checks. This will ensure that you do not make the same mistake again.
3. Claiming Ineligible ITC
Some businesses can end up claiming Input Tax Credit (ITC) when they are ineligible for it. This can be due to a misunderstanding of the rules given under Section 17(5). Check this section for blocked credits to understand whether your business is eligible for it.
4. Incorrect Tax Categorisation
Some can make an error when picking tax categories between IGST, SGST, and CGST. It could occur due to misunderstanding the inter-state and intra-state supply rules. So what enterprises can do is cross-check the supply rules before billing. They can then amend their incorrect invoices as soon as possible.
5. Mismatch
There could be a mismatch between GSTR-3B and GSTR-1. It happens because of not reconciling the sales invoices with returns. In this case, enterprises can reconcile their invoices monthly along with cross checking the purchase and sales report. However, businesses should maintain logs for corrections or amendments past this point.
6. Ignoring GST Notices
Sometimes, businesses can accidentally ignore GST notices. It happens due to not monitoring the GST portal’s notifications. So, people need to keep an eye on the portal regularly. If they need to file documents, then they need to do so as soon as possible. Enterprises can also seek professional assistance at this point.
7. Failing to Maintain Records
It can be consequential if enterprises do not maintain proper records. It’s not the best idea to rely on manual record-keeping while ignoring the documentation needs. For this reason, businesses can digitise their records using cloud-based systems. They can even perform audits frequently to ensure the completeness and accuracy of records. It is also recommended that the GST registration be done through current account.
Conclusion
Avoid making filing errors as much as possible since that will strengthen your business’ paperwork while ensuring compliance. Even when you face any issues, you can stay updated with the regulations using some tools and adopting some practices. This way, not only can you avoid penalties but also save time while focusing on growth.
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