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What Common Errors Should be Avoided after GST Registration?

GST Registration Error

Since July 2017 GST has successfully covered a long distance in India. It has made starting a business in India so easy that anyone can start and run his/her business smoothly with the help of an Accountant (Bookkeeper). Due to this, the number of new businesses has increased rapidly. However, due to a shortage of adequate knowledge taxpayers become a defaulter under the GST Law.

It has been witnessed that some common mistakes are still made by many taxpayers, which may invite heavy consequences in the near future.

This article focuses on some of the most common errors made by the dealers/taxpayers, which are required to be corrected at the earliest.

Here are 11 errors that you must avoid after registering under GST.

Error#1: Choosing incorrect Invoice format and calculating taxes wrongly

At the time of auditing of firms, it was commonly observed that the traders were not issuing invoices in the specified format, like in many cases, place of Supply was not mentioned, wrong GST number of the purchaser was given in the Invoice, etc. Traders should take care of such errors because issuing a wrong invoice causes a denial of Input Tax Credit to the receiver (i.e. the purchaser). It may attract unnecessary penalty from the department as well. In many cases, dealers are charging CGST/SGST while the requirement was all about IGST.

Error#2: Missed to mention the HSN Code in the invoice

As per the GST Law, all entities whose annual turnover in the preceding FY is more than ₹1.5 crores are strictly required to mention the HSN Code while issuing invoices. However, in many cases, registered dealers do not comply with this rule.

Error#3: Not issuing the E-Way Bill

As per the law, every dealer has to generate E-Way Bill in case of the interstate transaction if invoice value is or more than ₹ 50, 000/-. However, due to lack of checks, dealers do not comply strictly with this rule, but this can be easily tracked by the Govt. from GSTR-1. This wrong practice must be corrected immediately, because it may attract a heavy penalty.

Error#4: Not displaying the GST Number at the Business Premises

In accordance with the GST Law, every registered person is required to display – Name of the firm, Address of the firm and the GST Number right at the business place. But unfortunately, a maximum number of persons are not paying any attention towards this seriously. This is punishable under the GST Law.

Error#5: Non Filing of GST Return

This is the hardest part of the story, which most of the entrepreneurs are doing nowadays. Due to the easiness of GST Registration procedure, they get registered under the GST Law and right from the next month onwards become defaulter by not filing the appropriate GST Returns adequately. This attracts a penalty of ₹ 50/- per day, which after few months becomes so huge that, it becomes difficult for him/her to come back to the main source. And consequently, becomes a ‘voluntary defaulter’.

Error#6: Confusion between GSTR-3B and GSTR-1

This is another common mistake. Traders are taking services of accountants, who themselves are not aware of which Return is required to be filed. Thus, it is important to know the purpose of various GST Returns. Without filing GSTR-1, they just file GST-3B on monthly basis. And, due to this the opposite party does not get the credit benefits of the GST paid.

Error#7: Receiving ITC without Invoice

Under the GST circumference, it is mandatory that, one should hold a valid GST invoice while claiming for GST Credit. However, at the time of the audit, it has been observed that many dealers are taking credit benefits without having a valid GST invoice or availing GST Input the wrong way.

Error#8: Getting ITC against Bogus Bills

As per newspaper/news channel reports, many dealers are buying fake bills from dealers to avail GST Credit which may result in a legal action in the future. The GST Department is going to investigate such cases, where GST Dealers have paid off their GST liability with the help of GST Credit. And, it is good to keep in mind that if a single dealer is found guilty in such kind of scam, by using the latest technology, the whole chain will be detected very easily. So, such kind of illegal and unethical practice should not be practiced at any stage.

Error#9: Selling materials under the lower rate bracket

In order to get a good margin and to get rid of competition, dealers sell their products of the higher tax rate at the lower tax rate. But such dealers will get the worst reward of this practice very soon while filing GSTR -9 because in this Annual Return the dealer will have to provide the complete details of the Inward supply made along with their HSN Code. And through this such dealers can be easily tracked by the department and heavy penalty would be imposed to them.

Error#10: Filing of Final Return (i.e. GSTR-10)

This is the error which is associated with GST cancelled dealers. As per the GST law, when the registration of a GST Dealer is cancelled, he/she is required to file GSTR-10 Final return within 3 months from the date of Receipt of cancellation order. In case of default in filing GSTR-10, a penalty of ₹ 200/- per day has been prescribed to be levied. Lack of proper knowledge may attract unnecessary burdens.

Error#11: Filing of Annual Return (i.e. GSTR-9)

As per the GST Law, every GST registered person is required to file an Annual Return after the closing of each Financial Year within six months of the closing of the Financial Year. It must be taken care that every registered person has to file the Annual Return even when his/her GST Number has been cancelled. The due date for filing GSTR-9 (Annual Return) must be taken care of and it needs to be considered if there is any extension in the Due Date.


Above discussed errors are some of the most common mistakes which the GST Registered persons are practicing. Under the GST law, the consequences of being a defaulter might cost you a fortune. Thus, it is highly advisable to comply with all the guidelines laid down under the GST law.

Arpita Bora is leading the content writing team at HostBooks Limited. She has pursued her Masters in Commerce. With over 4.5 years of experience in technical and creative writing, she specializes in both long and short-form digital content.

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