Filing GST returns is a monthly or quarterly obligation for registered businesses in India. However, even minor mistakes in your filings can attract penalties, notices, or even cancellation of registration. Below are five common GST filing mistakes that can cost your business dearly if not avoided.
1. Missing Deadlines
One of the most frequent and costly mistakes is not filing GST returns on time. Even a one-day delay can attract late fees and interest, which adds up quickly if you're consistently behind schedule.
2. Wrong Input Tax Credit (ITC) Claims
Claiming ITC without proper invoices or claiming ITC on ineligible goods/services is a major compliance violation. Mismatches with your suppliers’ GSTR-1 filings can also result in notices and ITC reversal.
3. Ignoring Reconciliation
Many businesses fail to reconcile their purchase register with GSTR-2B monthly. This leads to errors in ITC claims and non-compliance issues that can delay refunds or attract scrutiny from the GST department.
4. Filing Nil Returns by Mistake
Submitting a Nil return when there was business activity results in under-reporting of liability. This can lead to interest penalties and an investigation from tax authorities.
5. Incorrect HSN/SAC Codes
Using the wrong HSN or SAC codes for goods and services can lead to incorrect tax rates being applied, attracting penalties or even rejection of the return by the system.