1. Errors while uploading data invoice-wise in GSTR-1
GSTR-1 requires that invoice-wise data be uploaded of all outward supplies such as invoice date, invoice number, place of supply, rate of tax, etc. Due to the vast amount of data to be submitted, taxpayers sometimes make errors while entering such data, and this causes a mismatch between the GSTR-1 and GSTR-3B. A taxpayer needs to be very careful as there is no provision to amend the return once it is filed.

2. Claiming the incorrect input tax credit
GSTR-2A is an auto-generated return in which a taxpayer’s registered purchases and related input tax credit are declared by the respective supplier. A taxpayer, on the other hand, is required to separately disclose their input tax credit when filing returns. While doing so, they should report and claim the right value of input tax credit. If a higher value is disclosed, there is no way to revise the return, and hence the difference needs to be paid along with interest in the following month’s return. A GST Health Check Report will give a taxpayer the exact difference of input tax credit declared in the returns filed and the GSTR-2A. Simply download the report and go to the GSTR-3B vs 2A tab to cross-verify data that has been filed.  

 

Incorrect ITC

3. Not filing your NIL return
Often taxpayers have the misconception that GST returns do not need to be filed when they have no transactions to report for a tax period. This could result in penalties due to non-filing or delayed filing of returns. A taxpayer should file a NIL return even if they may have no transactions to disclose for any particular period. This would also enable the subsequent filing of returns as the GSTN does not allow returns to be filed in case any previous period’s returns are not filed.

4. Disclosure and payment of the tax under the wrong GST head
There are several heads under which tax is reported while filing GST returns. Some taxpayers make the mistake of entering the GST liability or input tax credit under the wrong GST head. Even at the time of making payment, the tax is sometimes paid under the wrong head, or interest is paid under the tax head and so on. One needs to be cautious when making tax payments as the GSTN does not allow inter-utilisation of taxes. This could lead to an unfavourable working capital due to unplanned cash flows.

5. Categorising zero-rated supplies as nil-rated and vice versa
Several taxpayers confuse zero-rated with nil-rated supplies, though they do not mean the same thing. In the case of zero-rated supplies, usually only exports and supplies to an SEZ fall in this category. However, in the case of nil-rated supplies, all goods and services on which the tax rate in 0% fall in this category. No input tax credit can be taken in the case of nil rated supplies. A taxpayer needs to be careful to not enter exports under the nil-rated category when filing returns. The Health Check Report, in its section-level summary tab, gives a taxpayer the differential amount in case any invoices have been entered under the wrong category when filing returns.

Zero rated

6. Understanding the applicability of Reverse-charge mechanism
The Government recently simplified things for businesses by restricting the applicability of reverse-charge to certain notified goods and services. While this list is yet to be issued, businesses now need to understand and identify whether any of these provisions apply to them. Service providers, on whose services reverse charge is applicable, should be careful to not pay GST on the same, which would lead to the double payment of taxes. Taxpayers should also take note that reverse-charge payments can only be made in cash, and input tax credit cannot be utilised.

7. Reversal of Input Tax Credit and Blocked Credits
As per law, Input Tax Credit should be reversed in some instances such as – payments not made to suppliers in 180 days, inputs used partly for personal purposes, capital goods sold, free samples given to customers or business partners, goods destroyed, etc. In addition to this, there are certain goods and services on which credit is ineligible. Taxpayers need to keep in mind the implications of claiming the same. Failure of which could result in the GST department issuing notices, which could ultimately lead to interest and penalty being charged. The Health Check Report gives a taxpayer a month-wise breakup of input tax credit that has been reversed, as well as ineligible ITC. The report can be downloaded, and all details pertaining to ineligible and reversed ITC can be found in the is GSTR 3B tab.

8. Amendments made to GST returns
The concept of amendment in returns did not exist in the pre-GST era where invoices belonging to a particular period were allowed to be added or amended at a later date. However, not disclosing an invoice pertaining to an earlier period could result in interest being chargeable right from the invoice date. It would be ideal for businesses to issue credit or debit notes rather than amend the original invoices in such cases. Through the Health Check Report, a taxpayer can track all invoice-wise amendments made on an annual or monthly basis, in the GSTR-1 vs 3B tab.

Amendments

Though the Government implemented GST in India with a view to simplifying the indirect tax system, the return-filing process can sometimes seem quite arduous. At the same time, it is up to every taxpayer to stay 100% compliant, with minimal errors made for the overall health of their business. Every GSTIN can use ClearTax’s FREE integrated tool for GST registered businesses to track and check their compliance level for GST Returns filed. 

Difficulties in GSTR-1

  • Outward supplies have to be divided into 23 types as per form notified and more as per online
  • Number of Tables to be filled as per notified form is 10 whereas it is 19 as per online form

GSTR-1 6 Types of Errors

  • Data entered in wrong table/sub-table/tile.
  • Data entered in correct table but field value is wrongly
  • Data is not at all entered (missed).
  • Data entered
  • Data entered belonging to other dealers
  • Data amended but

GSTR-1 – Common Errors 1 Data entered in wrong table/sub-table/tile

  • Shifting of invoice from one table to another table is not directly possible through Wrong data to be deleted and right data to be entered. (Use Table 9/10
  • B2B Sales entered as B2C Sales
  • RCM purchases entered in B2B Sales
  • Zero rated sales entered as Nil Rated sales
  • 1% sales entered as deemed exports

GSTR-1 – Common Errors
2 Data entered in correct table but field value is wrongly entered

  • Inter State sales entered as Intra State Sales
  • GST Number, Invoice/Dr Note/Cr Number, Tax Amount, Place of supply wrongly entered

These mistakes can be rectified using Table 9/10 in subsequent month GSTR-1

GSTR-1 – Common Errors
3 Data is not entered at all (missed)

  • Invoice is not entered in GSTR-1

These mistakes can be rectified using Table 9/10 in subsequent month GSTR-1

GSTR-1 – Common Errors 4 Data entered twice

  • Invoice is not entered in GSTR-1

These mistakes can be rectified using Table 9/10 in subsequent month GSTR-1

GSTR-1 – Common Errors
5 Data entered belonging to other dealers

  • By mistake invoices belonging to other dealers entered

Possible Solution:

Through amendment invoice cannot be deleted. One way is to issue a credit note for full amount.

GSTR-1 – Common Errors
6 Data amended but wrongly.

  • Data was amended using Table 9/10/11 in subsequent But the amendment was wrongly carried out.

Possible Solution:

A particular record or invoice can be amended only once. Issuing a credit note or debit note may be one option.

GSTR-1 – Common Errors

  • Data was amended using Table 9/10/11 in subsequent But the amendment was wrongly carried out.

Possible Solution:

A particular record or invoice can be amended only once. Issuing a credit note or debit note may be one option.

GSTR-1
Things that cannot be amended/rectified

  • A bill of supply cannot be changed as a Tax Invoice
  • Type of Export – With /Without payment cannot be amended
  • Invoice Date cannot be shifted to another
  • One Place of Supply (POS) cannot be split into 2 by way of
  • A record cannot be amended more than once
  • HSN and Document summary cannot be amended

GSTR-3B
Common Errors

  • Next Year September Month Return
  • Filing of annual return whichever is earlier

Law relating to amendment of GSTR-3B

Section Details
39(1)

 

Rule 61

 

Obligation to file return
39(9) Allows rectification of omission or incorrect particulars

 

1) Next Year September Month Return

2) Filing of annual return whichever is earlier

Common Errors in 3B

  • Many Press Notes, Circulars, Notifications and other material issued. One may refer to those sources for more
  • One need to follow the GSTIN website rules and regulations and input validation controls while filing the

Common Errors in 3B

Under reporting in 3B Possible Solution  
Taxable Value Tax

 

ITC

Add in the subsequent 3B

 

Add in the subsequent 3B and pay interest if applicable Add in the subsequent 3B

Over reporting in 3B Possible Solution  
Taxable Value Tax

 

 

ITC

Reduce in the subsequent 3B

 

Reduce in the subsequent 3B and not eligible for any interest. If not possible seek refund.

Reduce in the subsequent 3B

Common Errors 3B Examples

Month Correct Taxable Value Value Reported in 3B
April 100.00 80.00
May 150.00 170.00 (150+deficit20)

Month IGST Amount Value Reported in 3B
May 50.00 60.00
June 10.00 0.00

 

(10- excess 10)

Comparison of 3B and 1values

  • Possible Scenarios
GSTR-1 GSTR-3B Action
Correct Correct No issue
Correct Wrong Adjust the difference in next 3B
Wrong Correct Amend the difference in next R1
 
Wrong                      Wrong                          Adjust / Amend 3B and R1

Notices may be received for differences between R1 and 3B and 2A/2B with 3B.

Keep amendments / adjustments data ready to reply for those notice.

Common Errors R1 and 3B

  • IGST Sales reported correctly in R1 but reported as CGST/SGST sales in 3B or vice versa
  • Credit Notes reported in R1 but not reduced in 3B

Precautions

  • Use trusted software to prepare and file GST return returns
  • Cross check the data uploaded to website before adjusting liability
  • Data relating to amendments /adjustments made in subsequent returns should be recorded separately in books of accounts
  • Un reported Invoices in 2A/2B should be informed to vendors regularly
  • Read instructions to returns and various notifications and circulars issued regarding filing of returns and amendments thereof