1. Paying Tax under Wrong GST Category

Various businesses have encountered loss because they paid under wrong categories. While filing GST returns, make sure you are paying your tax under the right category. 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.

Incorporation effectively creates a protective bubble of limited liability, often called a corporate veil, around a company's shareholders and directors. As such, incorporated businesses can take the risks that make growth possible without exposing the shareholders and directors to personal financial liability outside of their original investments in the company.

2. Treating Zero rated sales as Nil rated and vice versa

Nil rated Exempted of Nil rated sales those which are liable to 0%. Input tax credit Types cannot be claimed on such supplies. Some items which are nil Zero Supply Non-G51 Rated rated include grains. salt. jag gory, etc.

Zero rated Supplies are made overseas and to Special Economic Zones (SEZs) or SEZ Developers come under the zero-rated supplies. This supply attracts a Zero GST . For such supplies, ITC can be claimed. Especially exports without payment of GST.

taxable Several taxpayers confuse zero-rated with nil-rated and Exempt Supplies supplies, though they do not mean the same thing Nil Rated Zero Rated Non taxable Exempt Supplies.

3. Booking ITC without following Rules

As per law. Input Tax Credit should be taken only when we are receiving within 180 days otherwise it should be reversed as - payments not made to suppliers in 180 days. Several Inputs are blocked credit for which we cannot input some of the examples are : used partly for personal purposes, capital goods sold, free samples given to customers or business partners, goods destroyed. Inputs for motor Vehicles and related expenses.

There are some indelible Credits for which public make mistake some of the example are Construction Expenses, Lost Invoices,

As per Rule 36(4) you can take only input which are appearing in your GST -2A/2B. only 100 % is allowed as per Current rule.

4. Non Filing of Final Return after Cancellation

As per GST laws, after your Cancellation of GST registration, you need to file one final return within 3 months. In this Final return we need reverse all the Credits of the stock which are held or we need to pay in output liability as sale of stock.

We need to Reverse the input on Capital goods based upon usage on monthly basis. The formula is T /60. Generally we need to reversal based upon usage left in 60 months of purchase. This is a common mistake where after cancellation they don’t file GSTR -10 and pay the reversal amount

GST Department issues notices and may levy huge penalty with interest for non filing of final return.

5. Not filing return for NIL return

It is important to be aware that you have to file GST Returns despite zero sales. If you fail to do so, you will be required to pay a penalty for late filing/not filing GSTR. If you have had zero sales in a particular tax period, make sure you file Nil returns. This is one of the major confusions people face,

There are some more errors which are Common mistakes.

  • Not Mentioning HSN wise summary in GSTR-1
  • Non updation of Additional place of business.
  • Non mentioning exempted turnover in GST return
  • Not paying RCM or paying unwanted RCM.


“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of situation.”


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