10 Common Mistakes to Avoid While Filing GST Returns in India
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While the new system of GST provides a lot of ease when it comes to record keeping, filing returns and maintaining compliance with tax regulations, errors do happen, especially for unwary taxpayers. While these errors may not always be intentional, they can lead to serious consequences such as fines and penalties. To avoid these errors, taxpayers should follow certain best practices, including ensuring that they file all returns on time, pay taxes under the correct GST heads, classify their supplies accurately, and adhere to input tax credit regulations.
One of the biggest mistakes that taxpayers make is declaring an incorrect amount of input tax credit in their returns. Since there is no provision to amend GST returns like in the earlier service tax and VAT systems, it's important for taxpayers to be sure they're claiming the right amount of ITC in their returns. Otherwise, any discrepancies will need to be paid in the next return with interest, which can be a costly mistake for businesses.
Another mistake that taxpayers often make is mixing up nil-rated supplies with zero-rated supplies. While both are taxed at 0%, they have very different definitions under the GST laws. For instance, nil-rated supplies typically include exports and supplies to Special Economic Zones, while zero-rated supplies apply to goods and services that are sold to buyers in India but not exported. It's also important for taxpayers to be careful not to confuse B2B supplies with B2C supplies as this could affect their GST calculations.
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