Top 5 Common GST Filing Errors and How To Prevent Them?

Filing GST returns often seems like trying to solve a Rubik’s Cube, and that too while being blindfolded! Even veteran accountants make mistakes now and then. The worst part is that a single misstep can lead to fines, delayed deadlines, or an unwelcome call from the tax office. This highlights how critical it is to avoid a GST filing error, as even a small mistake can have significant consequences.

Moreover, the actual question is: Why complicate GST filing more than it should be? Let us inform you that there’s a better way to go about this!

In this blog article, we will discuss five of the most common GST filing errors. Additionally, we will introduce you to EasyGST, one of the best GST software available, that enables you to file returns quicker and easier than ever before! No guesswork, no tension; it’s time to file your GST returns like a pro!

EasyGST

4.5

Starting Price

₹ 2900.00 excl. GST

Learn More

5 Common GST Filing Errors

Here are the list of 5 Common GST Filing Errors and check out how EasyGST is helping to resolve them:

1. Incorrect GSTIN Entry

Incorrect GST identification number (GSTIN) entries are one of the most common errors. A one-digit error can result in misfiling or rejection. The most frequent reasons for incorrect GSTINs are manual copy-pasting or data entry errors.

Why It Happens:

• Manual data entry without validation
• Copy-paste errors
• No internal verification processes

Solution:

• Implement a double-check process before submission
• Use a validated database of vendor and customer GSTINs
• Use software (like EasyGST) with automated GSTIN verification to avoid errors

How EasyGST Helps: EasyGST offers a GSTIN verification feature integrated within the application, which avoids errors by verifying the GSTIN at the time of data entry through cross-verification. This helps ensure each GSTIN is entered correctly and verified, which, of course, lessens rejection chances.

2. Mismatch in GSTR-1 and GSTR-3B

GSTR-1 and GSTR-3B are two critical forms. GSTR-1 reports outward supplies, while GSTR-3B is a summary return. Mismatches between these forms often result from inadequate reconciliation.

Why It Happens:

• Lack of proper reconciliation tools
• Failure to match invoices correctly
• Misreporting due to clerical errors

Solution:

• Reconcile sales invoices with GSTR-1 before submitting GSTR-3B
• Regularly verify transaction data using reconciliation tools
• Automate reconciliation with tax management software to minimize human error

How EasyGST Helps: EasyGST automates the reconciliation process, cross-checking data from GSTR-1 and GSTR-3B. Its reconciliation module ensures discrepancies are identified and resolved before submission.

3. Incorrect Input Tax Credit (ITC) Claims

Businesses sometimes claim ineligible ITC due to a lack of understanding of tax rules. Claiming ITC on blocked credits or missing invoices can lead to compliance issues.

Why It Happens:

• Misinterpretation of GST laws
• Absence of supporting documents
• Incorrectly calculated ITC claims

Solution:

• Maintain accurate records of invoices to support ITC claims
• Refer to the latest guidelines on eligible and ineligible ITC
• Leverage software with built-in compliance checks to ensure accurate claims

How EasyGST Helps: With EasyGST, businesses can track ITC claims effectively. It has advanced ITC match/mismatch reports that provide insights into potential errors, ensuring only valid claims are submitted.

4. Late Filing of Returns

Missing GST return deadlines is a costly mistake. Late submissions incur fines and interest charges. Consistently delayed filings can raise red flags with tax authorities.

Why It Happens:

• Poor time management
• Overlooking due dates
• Lack of automated reminders

Solution:

• Set up automated reminders for return deadlines
• Allocate sufficient time for data verification before submission
• Use comprehensive software that notifies users of upcoming deadlines

How EasyGST Helps: EasyGST offers automated reminders and deadline alerts. It provides a detailed calendar view, ensuring businesses never miss a return deadline.

5. Misclassification of Goods and Services

Incorrect classification leads to applying the wrong tax rate. Errors in HSN (Harmonized System of Nomenclature) codes and SAC (Service Accounting Codes) are common.

Why It Happens:

• Lack of awareness about correct HSN or SAC codes
• Errors in manual classification
• Frequent changes in code assignments

Solution:

• Make sure the employees handling tax classifications receive adequate training
• Refer to the official HSN and SAC code lists
• Use GST filing software that suggests appropriate codes based on descriptions

How EasyGST Helps: EasyGST includes a smart classification feature. It suggests appropriate HSN and SAC codes based on the product description, reducing the risk of misclassification.

Additional Tips to Improve GST Compliance

Regular Training: Conduct periodic training for your finance and accounting teams to stay updated on GST regulations.

• Internal Audits: Perform internal audits to identify and rectify errors before filing returns.
• Data Accuracy: Implement strict data management policies to maintain clean and accurate records.
• Stay Informed: Subscribe to GST newsletters and government updates to stay current on tax reforms.

Conclusion

Achieving GST compliance may appear daunting to most. However, it is truly attainable if businesses recognize the usual errors and rectify them in advance. Through precise GSTIN entries, reconciliation of returns, accurate ITC claims, timely filing, and proper classification of goods and services, companies can avoid severe penalties and litigation. Implementing trustworthy software solutions makes these tasks smoother.

With the right tools and processes, businesses can trust their tax returns. Sophisticated digital GST software like EasyGST provides the support required to reduce errors, remain compliant, and lighten workloads. It’s a proactive step towards accurate and efficient tax management.

Overall, to get your GST filing process perfect, you must spare time to go through some things. Make some changes if required, stay up to date with regulatory changes, and use software programs to eliminate human errors. Compliance is not just cost-effective but also keeps your company in a good position with tax authorities. GST filing must be convenient and simple, and that is possible by making the right decisions today.