Precaution to avoid common mistake in GST Returns


Precaution to avoid common mistake in GST Returns

Now a days, In GST, Every third or fourth person is receiving GST notices. For avoiding such notices this article will help you.


  • Mistakes in invoice-wise uploading data in GSTR-1

In GSTR-1, it requires to upload invoice-wise data of all outward supplies such as invoice date, invoice number, place of supply, rate of tax, etc. Due to the vast amount of data to be submitted, taxpayers sometimes make errors while entering such data, and this causes a mismatch between the GSTR-1 and GST-3B. It is also indirectly affects GSTR-2A of taxpayer.


  • Availing/Claiming wrong input tax credit

If there is a difference between GSTR-3B ITC and Form GSTR-2A which  is an auto-generated return in which a taxpayer’s purchases and related input tax credit are declared by the respective supplier. Then GST officer can issue GST notice and ask for inquiry. If officer found that, wrong or higher credit is availed than eligible then he can ask for reversal along with interest.


  • Non filing of NIL return

Some taxpayers have under the impression that when they have no transactions i.e. purchase or sales then no GST returns need to be filed. This could result in penalties for failure to file or delay filing of returns. A taxpayer must file a Nil return even if they may not have any transactions to report for any particular tax period. Also this may attract Notice in form of GSTR-3A. ⠀



  • Misconception about zero-rated supplies as nil-rated and vice versa

Many taxpayers have confuse between zero-rated with nil-rated supplies, though  they do not mean the same thing. In the case of zero rated supply, usually only exports and supplies to an SEZ fall in this category. However, in the case of nil-rated supply, all goods and services fall in this category on which the tax rate is 0 percent. In the case of nil rated supplies, no input tax credit can be taken.

While filing returns, a taxpayer needs to be careful not to enter exports under the nil-rated category. As they are treated as zero rated supplies.


  • Reversal of Input Tax Credit and Blocked Credits

As per law, ITC should be reversed in some instances such as – Input goods or services partly used for personal purposes, capital goods sold, free samples given to consumers or business partners, goods lost, goods destroyed, goods or service not received, payment not made to suppliers within 180 days, etc. Besides this, there are certain goods and services on which credit is blocked. Taxpayers need to keep in mind the implications of claiming the same. Failure of complying these provisions could result in the issuance of notices by the GST department, which could eventually result in paying interest and penalty.