Mistakes to Avoid While Filing GST Returns for Your Business

Filing GST returns is one of the most crucial responsibilities businesses need to fulfill regarding taxation in India. Submitting incorrect data, missing deadlines, or ignoring reconciliation can result in penalties, hefty interest charges, along with other compliance-related issues. 

The most important thing to note is that there is no system to amend GST returns. Thus, businesses need to be very careful when filing GST correctly. This post discusses some common mistakes that businesses make when filing their GST returns. Of course, avoiding mistakes will strengthen the foundation of the business as well. 

• Manual Input Errors

Manual input errors are one of the most common errors businesses make while filing GST returns. This mainly happens because of erroneous data entry and leads to major problems in the GST filing process. 

The biggest concern is that incorrect input data can be perceived as a mis-projection of finances, eventually leading to fraud charges. Take care of the data accurately and double-check before submitting the final input. 

• Claiming 

GSTR-2A creates records of registered purchases automatically, yet businesses are required to submit ITC claims while filing GST returns. Any incorrect input tax credit claims must go through proper rectification, as the original difference and associated interest will be due in the month following the error. 

• Not Filing NIL Return

One of the biggest mistakes that businesses make is not filing GST returns when they have no transactions to report for the given financial year. This is a serious mistake that often leads to penalties for non-filing or delayed filing of returns. It is important to file a NIL return when there’s no transaction to disclose. 

This also paves the way for subsequent GST filing returns, as GSTIN does not allow returns to be filled if returns of the previous period are not filled. A professional business loan agent also insists on filing regular GST returns to get rid of unwanted hassles in the future. 

• Disclosing Under Right GST Heads

Paying GST under the wrong heads is yet another common mistake businesses must avoid when filing GST returns. In case you disclose goods and services under incorrect GST heads, it may bring a considerable amount of trouble in the future, and it can affect legal as well as internal. Thus, it is important to choose the right GST heads while filing GST returns. 

Specific Mistakes for Different Types of GST 

CGST (Central Goods and Services Tax)

It is important to make sure that a business classifies transactions correctly as either intra-sate (CGST) or inter-state (IGST). This problem can cause serious tax calculations.

SGST (State Goods and Services Tax)

Different states have different slabs of GST rates for a similar product or service. Make sure to account for the differences while filing, or else it will cause inaccuracies. 

IGST (Integrated Goods and Services Tax)

ISGT applies to interstate transactions. Businesses must understand the concepts thoroughly and apply them correctly to avoid tax complications. 

GST Composition Scheme

Every business must follow certain rules when filing quarterly returns. Failure to do so will result in penalties or even exclusion from the scheme.

Checklist to Follow Before Filing for GST Returns

• Documentation
• Tax calculation
• Reconciliation
• Timeliness
• Reverse Charge Mechanism (RCM)
• Input Tax Credit (ITC)
• Amendments and Corrections
• GST Software and Tools
• Legal Compliance
• Audit and Review
• GSTN Login Credentials 
• Backup and Data Security
• GST Payment
• Compliance Records

Tips to Avoid GST Filing Mistakes

• Use professional GST Software
• Keep updating the GST knowledge
• Ask for professional guidance if needed
• Conduct internal audits
• Get familiar with all the amendments made in the GST

Parting Thoughts

GST¸ committing mistakes regarding GST can lead to serious consequences. It is crucial for every business to understand these and then move forward. Just like one can seek help from a loan agent app for lending options, businesses should seek help from professionals to get the GST filing process most accurately. 

Andromeda offers a wide range of business loans, unsecured or collateral-free, customized as per the client’s requirements. Business owners from different parts of the country can easily apply for these loans and get quick approvals. 

Also, it’s high time to take charge of tax compliance with reliable financial support and efficient practices. It is also important to stay updated with the new set of GST regulations to be successful in the ever-evolving world of taxation.