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List of Do’s and Don'ts under GST

Sakshi Jain
Sakshi Jain at March 13, 2023

Let's Familiar with Do’s and Don'ts under GST

GST was implemented almost four years back in India with the "One Nation One Tax" slogan. Simultaneously, most businesses and professionals have synced with this advanced tax scheme, some struggle. Besides, the government is constantly trying to relieve the companies and experts by providing new updates. Notwithstanding, there is a list of DO's and DON'Ts under GST to acknowledge all the government's assistance.

Do's under GST

  1. Filing GST Returns in the given period.

To circumvent notices from the government, you should furnish your GST Returns on the specified period. Furthermore, a delay in filing your GST Return may also attract interest and fines as directed.

  1. Uploading Data in GSTR 1

While filing GSTR 1, you need to provide various details. As GSTR 1 cannot be changed after filing. Hence, you must be careful when furnishing data to assure that no mismatches in the data are determined at the time of GST Reconciliation.

  1. Managing Proper Documentation

Keeping relevant documents is good even if your business does not come under the GST audit rules. Some essential documents should be held in the sales register, purchase register, payment challans, e-way bills etc. Furthermore, keeping records ensure a smooth GST Reconciliation process.

  1. Reconciling GST Returns

Timely reconciling GST Returns with the books of accounts encourages a business to identify any errors or omissions. It essentially helps save a lot of time, interest and penalties. It aids in ensuring that mistakes or omissions are addressed in the subsequent month GST Return rather than year-end.

  1. Reconciling E-Way Bills Issued with the Invoice specifications provided in GSTR 1

Every business should carry out the practice of reconciling their e-way bills issued with invoice details under GSTR 1. Moreover, you may receive a notice from the government in case of a mismatch of invoice items. Furthermore, this assists in the regular furnishing of the annual GSTR.

  1. Reconciliation Among GST Returns

Reconciliation among GST Returns assists in filing error-free yearly GST Return and assists in doing GST audits. Moreover, to get valid Input Tax Credit, you should reconcile your purchase record with your GSTR 2A.

  1. Reverse-Charge Mechanism (RCM) Concept

It would be most beneficial to stay updated regarding all the new notifications circulated by the government regarding the reverse charge mechanism. Moreover, you must note that in case of reverse charge payments, you can claim ITC.

  1. Notifying GST Authorities concerning a change in business

Any variation in the details of business saturated out during registration must be notified to GST authorities. Moreover, it would help if you informed the GST Authorities 15 days before such change in the business. However, you need to apply such a change on the GST Portal and all the prescribed documents.

  1. GST Audit

If your business turnover exceeds the two crores Indian Rupees mark, you should prepare your books of accounts audited by a CA or CMA. In accession to this, you need to present an audited GST Return together with audited reconciliation statements.


Don'ts under GST

  1. Paying GST under the wrong head

It would help if you were extra careful when paying GST, as you can make the mistake of paying GST under the wrong head. Moreover, GSTN does not give inter-utilization of unfair taxes, leading to an increase in the working capital.

  1. Filing Nil Rated Supplies as Zero-rated Supplies (Vice-versa)

Classifying Nil Rated Supplies as Zero-rated Supplies and vice-versa is the most noticeable error that you may commit. It would ease if you were careful while furnishing the details in your GST Returns as you cannot claim ITC for Nil Rated Supplies.

  1. Forgetting Nil Return filing

You may sometimes overlook filing your Nil Return. Neglecting to file a GST nil return may impede the flow of your subsequent return filing. However, in some matters, the GSTN does not allow to file unfurnished GST Returns.

  1. Applying Wrong Tax Rates

It would better stay updated regarding the new tax rates as the government keeps issuing new notifications. Moreover, when providing an invoice, you should also ensure that the tax rate imposed is correct to claim the valid ITC.

  1. Unnecessary GST payment

You may sometimes make unintentional GST payments by not recognizing the reverse charge transaction. In accession to this, it may also result in a double amount of GST. So it would help if you remembered whether the GST has to be paid by you or the recipient.

  1. Lapse Paying Tax on Job-work goods after the expiry of the specified period

If you are a leading manufacturer, you are likely to pay tax with interest if the goods sent for job work are not handed back within the prescribed period. However, if the moulds, dies, jigs and fixtures are not returned within the specified time, it is not considered the sale. Therefore, neither the principal nor the job-worker is responsible for paying any tax on them.

  1. Claiming Ineligible ITC

It would help if you never tried to claim ITC, which is inappropriate to be claimed, as you may get a notice from the GST authorities. Here are some of the typical cases where ITC cannot be claimed :

  • Not paying the supplier within 180 days
  • Input goods used partially for the personal purpose
  • Distribution of free sample
  • Capital goods being sold
  • Goods destroyed
  • Etc.

The Bottom Line

If you comprehend the above-provided list of do's and don'ts under GST, you can remain GST compliant and avoid notices from the GST department. However, you may also use Masters India autoTax GST Software and e-way bill software to comply with GST orders. This software is a programmed solution that diminishes the chances of GST non-compliance to 99.99%.

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