Filing GST Returns: 5 Mistakes That Can Attract Penalty

Did you know that a penalty of Rs. 10,000 or the amount equivalent to the tax amount must be paid if any mistake occurs in GST compliance? If you want to prevent such situations, then you must know the most common mistakes in filing GST returns. 

In this blog, we shall discuss various types of GST compliance mistakes, their consequences, and some tips to avoid such mistakes. 

What Happens if I Make Errors in Filing GST Returns?

The following are the consequences of making errors in filing GST: 

• Penalty: Non-compliance can result in fines up to ₹10,000.
• Legal Actions and Investigations: GST authorities may initiate investigations into your compliance.
• Loss of Input Tax Credit: Mistakes can lead to disallowance of input tax credit claims.
• Scrutiny from GST Authorities: Increased chances of audits and scrutiny from GST officials.

Common Mistakes in Filing GST Return

Filing GST returns is not an easy task. It requires skill, knowledge and know-how in accounting. Thus, mistakes are a bit difficult to prevent. In this section, we will discuss the most frequent GST filing errors. 

1. Claiming ITC Inaccurately 

One of the most common mistakes companies make while filing GST returns is over-claiming input tax credit (ITC). Incorrect ITC claims can lead to failure to offset GST liabilities or, in certain cases, invite scrutiny from the GST department. It is best to double-check your ITC claim before proceeding with the return filing. 

2. Not Filing your NIL Return

Businesses need to be aware that if there is no transaction, then they do not need to file GST returns for that particular period. But that’s now what GST regulation permits. If you are not filing NIL returns, you may face consequences. 

3. Designating Incorrect GST Rates to Product or Service

While generating invoices manually, you may accidentally designate incorrect GST for the products or services you offer. If the mistake is not corrected in time, it can attract legal complications. These mistakes can happen due to inexperience. Do consider hiring a professional accountant to avoid such mistakes.

4. Last-Minute GST Returns Filing

Late GST filings can be penalized along with interest payments. Several enterprises are facing the problem of last-minute submissions due to the unavailability of the data. 

5. Keeping Up with GST Updates and Changes

GST laws and rules are subject to frequent updates. Staying informed about the latest GST notifications, circulars, and changes in tax rates or provisions is crucial to prevent any errors in GST filing. 

GST Return Filing Tips

Following is the list of tips that can help you prevent a significant financial loss due to an error in GST return filing: 

Maintaining Proper Documentation 

Maintaining an organized documentation record is the first step towards preventing GST filing mistakes. Whether it is purchase records, bills of supply, or sales invoices, keeping the record up-to-date is the most important thing in the GST filing process.

Accurate Invoicing 

Typos in invoices can lead to major compliance issues. If you are generating invoices manually, you should embrace invoicing software like Munim Accounting & Billing to get typo-free invoices efficiently. 

Not Ignoring GST Notice

If you happen to receive GST notices and ignore them, thinking that you are not at fault, you are making a big mistake. Respond to GST notices immediately to avoid heavy penalties or legal action. 

Verifying GSTIN of Suppliers 

Some businesses use fake GSTINs to evade GST. If you happen to purchase supplies from such businesses, you may not get an input tax credit. 

Complete Knowledge of the Composition Scheme 

If you have adequate knowledge of the Composition scheme, it may lead to accurate filing. Knowing all the rules and regulations about the GST’s composition scheme is best. 

Also Find out Top Features to Consider While Choosing Your GST Filing Software

Over to You

So now that you know all the common mistakes in filing GST returns, I hope you won’t make the same mistakes. If you are starting a new business and looking for tools that simplify the GST return process, then you must check out Munim GST Return Filing software. It simplifies the GST return filing process so you can focus on growing your business. 

FAQs on Filing GST Return

1. How do you File a NIL GST Return through SMS?

Here is the format to file the NIL GST Return via SMS: 

For Nil GSTR-1: Type NIL R1 <GSTIN> <Tax Period>

For Nil GSTR-3B: Type NIL 3B <GSTIN> <Tax Period>

​For example, if your GSTIN is 11ABCD1234X1X1 and you want to file a quarterly return for April-June 2024, you should type: NIL R1 33ABCP1234Z1Z1 062024

2. How to Rectify Mistakes in GST Returns​

Step 1 – Log in to the GST portal, go to the ‘Service’ section 

Step 2 – Click on ‘Returns’, then go to ‘Amendment of Returns’ 

Choose the returns you want to amend from the list and make the necessary corrections. 

3. How do you Claim GST Refunds if you Paid them by Mistake​?

To claim a GST refund for the tax amount paid by mistake, follow the below-mentioned steps: 

Step 1: Log in to the GST portal 

Step 2: Go to the ‘Services’ tab 

Step 3: Click on ‘Refunds and then select ‘Refund Pre-Application Form’

Step 4: Fill all the details in the application form and submit. 

4. How do you Correct GST registration Spelling Mistakes​ in a Company Name?

To correct a spelling mistake in your GST registration, you have to submit Form GST REG-14 via the GST portal. Before submitting, ensure all the spellings are correct. Keep the supporting documents ready because the GST officer will verify the updated details. The process may take around 15 working days to complete. 

5. How do you Correct GSTR 3B Mistakes in the GST portal?​

Here is the step-by-step process to revise GSTR-3B: 

Step 1: Go to the GST portal and log in with your credentials

Step 2: Navigate to ‘Returns Dashboard’ 

Step 3: Select the month and year for which you want to revise the return

Step 4: Click on ‘Prepare Online’

Step 5: Click on ‘Reset GSTR 3B’ 

Step 6: On the next screen, click ‘Yes’ & ‘OK’. 

Your GSTR 3B is now reset for the selected year and month. You can refile incorporating necessary changes. 

6. How to Rectify Mistakes in GSTR 9?​

There are no provisions to rectify mistakes in GSTR 9.