Mistakes to avoid while filing GSTR 1

Introduction

The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Every registered person under GST is required to file various returns, including GSTR 1, which is a monthly or quarterly return that contains details of all outward supplies made during the period. However, filing GSTR 1 can be a challenging task for businesses, and any errors in the return can lead to penalties and legal issues. In this blog, we will discuss the mistakes to avoid while filing GSTR 1.

What are the mistakes to be avoided while filing GSTR 1?

There are different mistakes to be avoided while filing GSTR 1. Some of them are listed below-:

Mistake 1: Incomplete or inaccurate information

One of the most common mistakes made while filing GSTR 1 is providing incomplete or inaccurate information. This can lead to discrepancies in the return and result in rejection or scrutiny by the authorities. To avoid this, businesses should ensure that all details of the outward supplies, including the name, address, and GSTIN of the recipient, the HSN code of goods or services, the quantity, value, and tax rate, are entered correctly in the return.

Mistake 2: Late filing of GSTR 1

Another mistake that businesses often make is filing GSTR 1 after the due date. Late filing of GSTR 1 can lead to penalties, interest, and even cancellation of the registration. To avoid this, businesses should ensure that they file the return before the due date, which is the 11th of the following month for monthly filers and the 13th of the following month for quarterly filers.

Mistake 3: Non-reconciliation of data

Businesses should ensure that the details provided in the GSTR 1 match with the books of accounts. Any discrepancies in the data can lead to issues during audits and inspections. To avoid this, businesses should reconcile the data in the GSTR 1 with their books of accounts regularly.

Mistake 4: Failure to report credit notes and debit notes

Another mistake that businesses often make is failing to report credit notes and debit notes in the GSTR 1. Credit notes are issued when there is a reduction in the value of the outward supplies, while debit notes are issued when there is an increase in the value of the outward supplies. Failure to report credit notes and debit notes can lead to discrepancies in the return and result in penalties and legal issues. To avoid this, businesses should ensure that all credit notes and debit notes are reported correctly in the GSTR 1.

Mistake 5: Not reporting nil returns

Businesses that have not made any outward supplies during the period should still file a nil return. Failure to do so can lead to penalties and legal issues. To avoid this, businesses should ensure that they file a nil return if they have not made any outward supplies during the period.

Mistake 6: Not reporting exports and deemed exports

Exports and deemed exports are zero-rated supplies and these are eligible for a refund of the taxes paid on the inputs used in the production of the goods or services. Failure to report exports and deemed exports in the GSTR 1 can result in the loss of the refund. To avoid this, businesses should ensure that they report exports and deem exports correctly in the return.

Mistake 7: Not reporting advances received

Advances received for the supply of goods or services should be reported in the GSTR 1. Failure to report advances received can lead to discrepancies in the return and result in penalties and legal issues. To avoid this, businesses should ensure that they report advances received correctly in the return.

Mistake 8: Not filing amendments

Businesses may need to make amendments to the GSTR 1 due to various reasons such as incorrect information, changes in the details of the recipient, or cancellation of the supply. Failing to file can lead to various consequences for businesses. To avoid this it is essential for businesses to file amendments in GSTR 1 on time and ensure that all their sales data is accurately reported to avoid any penalties or compliance issues.

Writer’s Choice – GST returns will reflect in your Income Tax Passbook (Form 26AS)

Conclusion

Filing GST Returns can be a complex process, and businesses must ensure that they avoid common mistakes to avoid penalties and fines. The mistakes mentioned above are some of the most common mistakes that businesses make while filing GSTR 1. By avoiding these mistakes and ensuring accurate and complete information is entered into GSTR 1, businesses can streamline the tax system.