Often, some mistakes are made while filing GST returns, which can lead to heavy penalties, late fees and even legal issues.
GST: GST (GST) imposed on goods and services in India has replaced many levies like VAT, excise duty, service tax. With the implementation of GST, there have been many changes in the taxation of India. In such a situation, businessmen and individuals often make some mistakes while filing GST, which can lead to heavy penalties, late fees and even legal issues.
Filing correct GST returns is essential to avoid penalties and to maintain trust with the tax officer. Let us discuss some common mistakes people make at the time of GST return filing.
1. Wrong ITC claim and reversal:
The tax liability of a business can be reduced with the help of Input Tax Credit (ITC). As per GST rules, availing of ITC is subject to certain terms and conditions. There is a need to report the correct value of ITC while filing the GST return.
2. Non-payment of GST in RCM:
Under Reverse Charge Mechanism (RCM), the tax charge is passed back from the seller to the buyer, making the buyer of goods and services liable for tax payment. If one does not meet the reverse-charge tax responsibly, it may result in interest payment and loss of ITC.
3. Forgetting to mention exempt turnover in GST return:
Nil-rated does not have any impact on GST liability, but should be reported at the time of filing return. Every registered business under GST has to report exempt or nil-rated sales in GSTR 3B and GSTR 1.
4. Filing under wrong GST category:
While filing the GST return, it has to be kept in mind that the GST liabilities or ITC should be entered under the correct category. Making such a mistake can lead to unwanted cash flow and mess in the rest of the calculation.
5. Mismatch of data while filing GSTR 3B and GSTR 1:
While filing GST returns, care needs to be taken to match GSTR-3B (summary return) with GSTR-1 (sales return) on a monthly basis. Ignoring it can often result in revenue loss.
