common-mistakes-in-gst-returns


As a business owner, filing GST returns can be a daunting and complicated task. Any mistakes made while filing GST returns can lead to penalties and fines from the government. Therefore, it is essential to file accurate and error-free returns. In this blog, we will discuss some common mistakes that businesses often make while filing GST returns and how to avoid them.

 

Incorrect Reporting of Sales and Purchases

One of the most common mistakes businesses make while filing GST returns is incorrect reporting of sales and purchases. Inaccurate reporting of sales and purchases can lead to the overpayment or underpayment of taxes, which can result in penalties and interest. To avoid this mistake, businesses should ensure that they maintain accurate records of their sales and purchases and reconcile them regularly.

 

Failure to Claim Input Tax Credit (ITC)

Another common mistake businesses make while filing GST returns is failing to claim input tax credit. Input tax credit is the tax paid on purchases used for business purposes. Businesses can claim input tax credit on their purchases and offset it against their output tax liability. Failure to claim input tax credit can lead to the overpayment of taxes, which can affect cash flow. Businesses should ensure that they claim input tax credit on all eligible purchases.

 

Filing Late Returns

Late filing of GST returns can result in penalties and interest. Businesses should ensure that they file their returns on time to avoid any penalties or interest. The due date for filing GST returns is the 20th of the following month for monthly filers and the 22nd of the following month for quarterly filers.

 

Non-reconciliation of Books of Accounts with GST Returns

Businesses should ensure that they reconcile their books of accounts with their GST returns. Failure to reconcile the books of accounts with GST returns can lead to discrepancies and errors. Businesses should ensure that they reconcile their books of accounts with their GST returns regularly.

 

Incorrect Reporting of GSTIN

Businesses should ensure that they report the correct GSTIN (Goods and Services Tax Identification Number) of their suppliers and customers. Reporting an incorrect GSTIN can lead to the disallowance of input tax credit and penalties. Businesses should verify the GSTIN of their suppliers and customers before entering it in their GST returns.

 

Conclusion

In conclusion, filing accurate and error-free GST returns is essential for businesses to avoid penalties and fines. Businesses should ensure that they maintain accurate records of their sales and purchases, claim input tax credit on eligible purchases, file their returns on time, reconcile their books of accounts with GST returns, and report the correct GSTIN of their suppliers and customers. By avoiding these common mistakes, businesses can ensure compliance with GST regulations and avoid unnecessary penalties and interest.