GST law has become the principal indirect tax law after subsuming most of the erstwhile indirect tax laws in India. However, it is a compliance-based law with monthly, quarterly and annual compliances to be ensured by the registered persons. Non-compliance can lead to a levy of late fees and interest. However, whenever it comes to return filing under GST law, taxpayers are prone to making some common mistakes. It is to be ensured that such mistakes are avoided to ensure the accurate filing of GST returns. Let’s understand some of the common mistakes that registered persons can make while filing GST returns.
Common Mistakes to Avoid While Filing GST Returns
Here are the 10 common mistakes that you should avoid while filing GST returns:
Claiming Incorrect ITC While GST filing
Taxpayers need to be careful when claiming ITC. The government time and again changed ITC provisions making them stricter to ensure that there is no unauthorised usage of ITC. As per the current provisions, the taxpayers need to match their purchases in books with GSTR-2A and GSTR-2B. ITC can be claimed only as per GSTR-2B. Thus, any mismatch between the same and GSTR-2B needs to be communicated to the suppliers. Many taxpayers make the mistake of not reconciling books with GSTR-2B leading to the contravention of the provision.
Not Paying GST for Inward RCM Supplies
Generally, you have to pay GST only on outward supplies of goods. However, there are certain supplies on which GST has to be paid by the recipient. These supplies are known as supplies under Reverse Charge Mechanism (RCM). Tax on inward RCM supplies needs to be discharged in cash. A few examples of such supplies include services received from the Goods Transport Agency (GTA), advocates, sponsorships etc. Many recipient taxpayers mistakenly do not realise that a particular service falls under RCM and thus, tax needs to be discharged by them.
Not Disclosing Exempt Supplies in GSTR-1 Form / 3B
GST law has classified certain supplies as exempt supplies. These supplies are exempted from GST and thus, no tax is levied on such supplies. Certain taxpayers often forget to disclose their exempt supplies in their GST returns. This prima facie happens due to the fact that these supplies are not liable to GST and thus, have no implication on GST tax liability. But the GST return requires disclosing exempt supplies.
Not Furnishing HSN Wise Summary in GSTR-1
The government has made it mandatory to disclose the HSN summary for all the taxpayers in GSTR-1 filing. Accordingly, taxpayers with turnover up to Rs. 5 crores are required to furnish their 4-digit HSN-wise summary. Earlier, these categories of taxpayers were exempted from reporting HSN-wise summaries. But as it has become mandatory, thus, taxpayers should make sure that they maintain HSN wise summary of their outward supplies and report it in their GSTR-1.
Disclosing Intra State Supplies as Inter-State Supplies and Vice Versa
Taxpayers often get confused about whether a particular supply is an intra-state supply or an inter-state supply. Place of Supply Rules are the key determinants for inter-state and intra-state supplies. In dilemma, taxpayers can end up selecting the wrong type of supply and accordingly end up paying IGST in place of CGST & SGST or vice-versa. Thus, you need to correctly disclose the place of supply in GSTR-1 form to ensure correct levy of type of GST.
Not Filing Final Return GSTR-10
There are various types of GST returns, including a dedicated one for surrendering GST registration India. If taxpayers want to surrender their GST registration, they need to file an application for the surrender of GST. However, even after the concerned GST officer approves the application and issues the order of cancellation of registration, the story does not get over. Taxpayers are required to file a final return GST in Form GSTR-10. GSTR-10 must be filed within 3 months from the date of the order of cancellation of registration. If the final return is not filed within the due date, then it will attract late fees.
Not Filing GST Returns Within Due Date
The government has fixed the due dates for all the returns under the GST law. Taxpayers should strive to file their GST returns within the specified due dates. Non-filing of GST returns within the due dates will lead to late fees and interest on the tax amount. It should be ensured that all the applicable returns on the taxpayers are filed on or before the due date.
Not Filing TCS Returns
Apart from the regular GST returns, certain categories of taxpayers are also required to file TDS/TCS returns. For instance, suppliers selling through e-commerce operators are required to file their TCS returns online as the e-commerce operators collect TCS from them. After filing the TCS return, the amount of TCS gets credited to the electronic cash ledger of such suppliers. These can be claimed as a refund from the GST department.
Claiming ITC for Blocked Credits While GST Filing
Certain supplies have been categorised under blocked credits. This means that the taxpayers cannot avail of ITC of these supplies except in case of certain exceptional cases. Some of these supplies include motor vehicles, immovable property, construction of the immovable property, goods/services utilised for personal purposes etc. Taxpayers might not be aware whether ITC is blocked for specific supplies and may end up claiming ITC for the same. The taxpayers might have to reverse ITC in the future along with applicable interest.
Not Charging GST at Correct Rates
The government has specified GST rates for each good and service. Further, the rates for RCM supplies are different. However, taxpayers often get confused about the GST rate applicable to them and might end up levying the wrong GST rate. This mostly happens when the supplier deals in multiple commodities. Thus, it is important that the taxpayers levy the correct GST rate on their outward supplies.
How You Can Avoid Above Mistakes?
Following were the common mistakes that taxpayers should avoid while filing GST returns. The best way to avoid these is to take the assistance of a tax professional while filing GST returns. They are well versed with the GST law and thus can ensure accurate and timely filing of GST returns. It also reduces the chances of notices and scrutiny by the GST department. In case you need any assistance in relation to GST compliances, feel free to contact the eAuditor Office
