10 Common Mistakes to Avoid While Filing GST Returns in India
10 Common Mistakes to Avoid While Filing GST Returns in India
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Taxpayers need to be careful with the details they submit on their returns, especially while claiming input tax credit (ITC) and paying taxes. Moreover, filing returns is a regular obligation and any mistakes could lead to penalties and compliance issues. Here are some of the most common errors that taxpayers should watch out for while filing their GST returns:
No Filing of Nil Returns: Taxpayers often assume that if they have no transactions in a particular period, there is no need to file a GST return. This is a wrong assumption and it is important for businesses to file the Nil return to remain compliant with the law.
Misreporting of Transactions: It is essential for businesses to accurately report all supplies in their GSTR-1 return. This includes both taxable and exempt transactions, as well as details of tax invoices, debit/credit notes, and movement of goods/services. Any errors in reporting the details of a supply may result in audits by the government and can also attract interest charges and penalties.
Incorrect ITC Claiming: It is essential to check and verify the amount of ITC claimed in GSTR-3B against eligible invoices and expenses before filing it. Any incorrect claim of ITC will result in unnecessarily delayed cash flows and working capital issues.
Misclassification of Goods and Services: Using incorrect HSN or SAC codes while classifying goods/services in GSTR-1 can lead to inaccurate calculations of the tax liabilities. The tax rates for different items are calculated using these codes, so it is crucial to ensure that the correct rate is applied.
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