Filing GST returns as accurately as possible is crucial for your business. Heavy penalties and late fees are JUST two common problems that you can face as a business owner when your GST return filing contains errors. It is very important for you to completely understand which GST returns apply to your business, not miss important fields, and ensure timely and correct GST filing with GST Billing App.
While GST Return filing online has become a norm, there are some mistakes that are being repeated by a lot of business owners. To ensure you are not one of them and avoid their unfavorable results, ensure you keep the following 5 points in mind:
1) Never Ignore filing GST returns even when there are no sales/purchases
Do not miss filing NIL returns if no sales or purchases happen during the tax period. GST law has made it compulsory to file NIL returns when there are 0 transactions. If you fail to do so, you will be fined and there is also a possibility of cancellation of your GST registration. With this, you will not be able to reap GST benefits like claiming input tax credit.
2) Failing to recognise Zero-rated and Nil-rated supply
Many business owners like you have this one as the most repeated GST filing error. They assume ZERO-rated and NIL-rated supply to be the same which leads to incorrect filing of GST returns. Both of these categories are different. NIL-rated supplies are those supplies that are taxable but have a zero percent of GST because they are exported out of India or come under a Special Economic Zone. If you claim zero-rated supply in the column of NIL-rated supply, this will have complications while claiming refunds/returns as your GST would be filed incorrectly.
3) Not paying Reverse Charge Mechanism (RCM)
If your business falls under the category wherein you must pay Reverse-Charge tax (a type of tax that is collected from recipients of goods or services), you are obliged to fulfill this GST mandate. If you fail to do so, then you will not be able to obtain an input tax credit. It can also lead to interest payments. Moreover, it can only be paid using challan and so knowing the right method of paying is also important to ensure timely GST payments.
4) Failing to reconcile GSTR-1 and GSTR-3B Return
GSTR-1 is a monthly/quarterly GST filing that contains details of all outgoing supplies. On the other hand, GSTR-3B is always filed monthly and is a self-assessment return filed by business owners which includes details of both sales and expenses. Matching or reconciling them is important because when they both are matched with no disputes, it ensures correct and error-free GST filing.
5) Incomplete documentation
Filing GST returns can only be a smooth process if you have proper and organized invoices, sales and purchase records, etc. These documents are necessary during audits and failing to present them can attract heavy penalties. You can even use online apps which can help you to generate invoices on your phone and can be stored there as well. This way, you can produce them immediately whenever required and remain in compliance with GST norms.
Your business can bear the loss as you will be fined heavily if your GST return filing is not proper and error-free. Mistakes like missing claiming TDS, not reconciling GSTR-1 and GSTR-3B and more written above are just a few examples. By ensuring the common mistakes highlighted in this article, you can ensure your GST filing is done accurately. Today, apps like MyBusiness can help you file GSTR-1, download GSTR reports, and much more. Explore today.