10 Common Mistakes Made by Taxpayers While Filing GST Returns

Common Mistakes Made by Taxpayers While Filing GST Returns

10 Common Mistakes Made by Taxpayers While Filing GST Returns

Both large and small businesses have to update and file the returns for GST with great care since mistakes could result in penalties or put money on hold for businesses utilizing electronic cash ledgers. Due to a lack of understanding, it became extremely hard for businesses to keep up with the new indirect tax laws, which resulted in mistakes while completing GST returns.

Many inquiries regarding filing GST returns to correct errors made throughout this procedure have come from different governments, private departments, and multinational companies.

In this article, we will discuss ten common mistakes made by taxpayers while filing GST returns in India and provide valuable insights to help businesses guide GST liability effectively and stay compliant.

1. Manual Data Entry Errors:

One of the most common GST filing mistakes and the one that should generally be avoided is manual data entry errors. The taxpayer is liable to make sure all information is submitted correctly and in the appropriate format, including supply address, counterparty GSTINs, invoice values and layout, non-repetition of invoice numbers, and date format. The taxpayer has to use the unique characters carefully and only when essential.

2. Tax Slab Compliance:

The HSN summary and the product’s tax rates must be calculated in accordance with the tax slabs provided by the GSTN, as specified by the taxpayers. There are five revenue slabs available right now: 0%, 5%, 12%, 18%, and 28%.

3. Non-Filing of the NIL Returns:

Non-filing of the NIL Returns: Taxpayers generally feel they are free from filing their GST Returns if they had no business within a specific tax period. This is untrue—businesses continue to be required to file a nil return even in a situation of zero transactions. Pay more attention to avoid these common GST mistakes.

4. Reverse Charge Mechanism:

Before registering for GST, supplier taxpayers have to be familiar with a complete understanding of the reverse charging system under GST. This greatly helps taxpayers in avoiding mistakes in their GST filing. The reverse charge includes the buyer paying the government directly for the GST on the products they have bought. Usually, this tax is paid by the buyer to the supplier, who then transfers it to the government.

To avoid paying double tax, suppliers have to decide if they relate within the RCM category when filing their GST returns and adjust the returns accordingly. Even for qualifying transactions, there may be situations in which the RCM is ignored. To help get rid of regular GST filing mistakes, this type of process for filing returns is wrong and has to be stopped.

5. Mistaking Zero-Rated for Nil-Rated supply:

The next common mistake is to mix up zero-rated and nil-rated goods. While export products and supplies to SEZs are regarded as zero-rated supplies, commodities and services with 0% applicable GST are regarded as zero-rated supplies. For the reason of avoiding GST mistakes and getting accurate GST, taxpayers must carefully and properly identify their supplies.

6. ITC Reversal & Credit Blockage:

Credit Blocking and ITC Reversal: In keeping with the many changes to the ITC legislation, the ITC will be returned in situations such as the following: ITC on goods used for personal use, goods lost or ruined, failure to pay the supplier within 180 days, capital goods sold, and samples, among other things. In addition, the Credit is prohibited for a few certain things. To avoid common mistakes in GST filing, taxpayers must be familiar with the ITC laws when filing and claiming ITC.

7. Paying Taxes Under the Wrong GST Head:

There are many GST heads, like IGST, SGST, and CGST. The taxpayer might fall afoul of the law if they pay taxes under the wrong GST Head. Only the CGST head may be utilized to pay the CGST. Note this when you

8. A mismatch between Annual Returns and Monthly/Quarterly Filing:

 The taxpayer has to file accurate GSTR-1, GSTR-3B, and GSTR-9. Notices to the taxpayer may be sent if there is a difference between the three GST filing reports. The GSTN is highly dynamic in this respect and will reject even the smallest level of a mismatch. Therefore, when filing these forms, the taxpayers have to exercise extreme care. The taxpayers gain from avoiding unnecessary mistakes and fees as a result.

9. E-WayBill Compliance:

Since the GSTN notified a reconciliation of the GSTR-1 & E-WayBill data, the taxpayer has to conform to the E-way-bill system. As a result, the taxpayer and vice versa must file accurate GSTR-1s about the e-WayBills.

10. Accurate ITC assertion

The taxpayer has to buy books and GSTR-3B, completely cross-check their auto-populated GSTR-2A, and correctly claim the ITC. Since a return can’t be changed or corrected once it has been submitted, it must be submitted again. Error-related delays can result in warnings, fines, and penalties. To avoid concussions, the taxpayer is required to include only the right amount of the ITC in their submission. That is, the taxpayer has to be familiar with how to submit a GST input tax credit claim.


To avoid notices, scrutiny, late fees, fines, and penalties, taxpayers are advised to take their time, finish correct GST returns, follow the exact performance of their firm, and cooperate with the GST system.

Using APIs and billing system integrations with software solution providers like GSTHero Software Solutions, appropriate GSTR filings may be performed.

If you file the wrong GST, the tax authority will issue an order requiring you to pay the correct amount along with penalties. You’ll need to pay the outstanding GST amount, the penalty, and also pay interest on the late payment. The interest is calculated from the date the tax should have been paid until the actual payment date.

No, the current GST filing system does not allow for revisions of filed returns. However, errors in a GST return can be corrected in the next return when the mistake is noticed.

If you have claimed the Input Tax Credit (ITC) incorrectly, you need to reverse the claim and pay the amount in the subsequent month’s return.

You cannot revise a filed GSTR-1 return. If you make a mistake in one month’s GSTR-1, you can correct it in the GSTR-1 for the following month or quarter. For example, if there’s an error in the GSTR-1 for January 2022, you can rectify it in the GSTR-1 for February 2022 or later months.

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