Many traders are still making frequent errors/mistakes after filing GST registration, which could have extremely significant consequences shortly. With this article, I’m concentrating on the frequent mistakes made by dealers that need to be fixed as quickly as feasible.
- Incorrect Invoice Manner and Tax Calculations – When companies are audited, it is typical to find that the merchants are not producing invoices in the format required by the department. Dealers frequently charge CGST/SGST instead of IGST when they are required to do so.
- Failure to mention HSN Code in GST Invoice – Under GST Law, all firms with an Annual Turnover of more than Rs.1.5 Crores in the previous financial year are required to disclose HSN Code on their invoices. In many circumstances, however, registered persons fail to meet this condition.
- Non-Issuance of E-Way Bill — Every dealer is required by law to generate an E-Way bill if the invoice value exceeds Rs.50,000/- in an Interstate transaction. Dealers, on the other hand, are not complying with this requirement due to a lack of checking, which the government can readily follow using GSTR-1. This practice should be stopped as quickly as possible, as it will result in severe consequences.
- Show of GST Number at Business Premises– Every registered person is required by GST Law to display the name of their organization, their address, and their GST number at their business location. However, the majority of people do not comply with this criterion.
- Failure to file a GST return– This is the most common error made by young entrepreneurs nowadays. Due to the ease with which a GST Registration can be obtained, they simply register it under GST Law and then become defaulters by failing to file a GST Return the following month, which attracts Rs.50/- per day penalty, which accumulates over time and makes it impossible for them to return to the mainstream. This turns them into voluntary defaulters.
- Filing either GSTR-3B or GSTR-1– This is yet another typical blunder that many traders are now doing. They are hiring accountants who aren’t even aware of which returns are required to be filed under the GST Law. They only file GST-3B every month and fail to file GST-1. As a result, the opposing party does not receive credit for the GST paid.
- Taking Input Tax Credit without an Invoice – Under GST Law, you must have a valid GST Invoice to take GST Credit. During the audit process, however, it was discovered that many dealers are receiving the credit without having a valid GST invoice or are receiving ineligible GST input.
- Merchandising Products in the Low-Rate Zone– Dealers are selling a product with a higher tax rate at a lower tax rate to make a large profit margin and eliminate competition. Dealers will feel the heat of this technique very soon while submitting GSTR -9 because this form requires dealers to provide details of inward supplies made with their HSN code, which allows departments to follow these dealers more readily.
- Failure to file the final return– This is a frequent mistake made by GST Cancelled merchants. When a GST Dealer’s registration is canceled, the law requires them to file a GSTR-10 Final return within three months of receiving the cancellation order. A penalty of Rs.200/- per day shall be imposed if the GSTR-10 is not filed on time.
- Annual Returns– Every GST registered person is required by law to make an annual return within six months of the end of each financial year. It is important to remember that even if your GST number has been revoked, you must still file an annual return.
These are some of the most typical errors made by GST registered persons as a result of a lack of information at their level as well as their accounting person’s level. Please keep in mind that under GST law, the repercussions of non-compliance are extremely severe. So, if dealers are making any of the above-mentioned errors, they should remedy them immediately.
Although every effort has been made to avoid any clerical or arithmetical errors, if they persist, please notify us so that we can rectify them. For more information: visit Corp roots for any assistance.
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