18 Oct



It has been almost 4 years since GST was introduced in India, and while most CAs, Tax Consultants, and businesses have been coping with the new tax system, some are still facing the problem. In addition, the government is constantly updating, adding to the complexity of things, and taxpayers need to stay up-to-date, to ensure compliance, and not to be served notices.

Here are some dos and don'ts that every GST taxpayer needs to know-


1.     File your GST return on time

As with previous indirect tax laws, there are various returns and forms to be filed/submitted under GST. The most basic compliance that will help the business avoid interest, late fees and notices are to ensure that all GST returns are filed on their respective due dates.

2.     Upload accurate data to GSTR-1

There are many fields to fill in when filing a GSTR-1 return. GSTN does not allow correction once the return is filed. While this may bother taxpayers, a little caution at the time of data entry will ensure that there is no need for any adjustment and correction in subsequent months ’returns.

3.     Keep proper documentation

This is a requirement for a GST audit. However, all businesses, even if they are not eligible for a GST audit, should have a healthy practice of keeping proper records under GST. This can mean purchase and sale register, fixed asset registration, payment invoice, e-way bill, etc. If proper documentation is maintained.

4.     Reconcile your returns with your account books

This is a very important process that businesses need to do on a monthly basis and do not wait until the end of the year to reconcile the returns filed with their account books. Timely reconciliation practice will enable you to identify any errors and mistakes. This can be improved by the return of the following month at the end of the year and thus there will be saved if there are interest and penalties.

5.     Reconcile e-way bills issued with challan details declared in GSTR-1

All taxpayers must match the e-way bills issued with the data provided in GSTR-1. This could be a reason to issue a notice to the taxpayer if the data does not match. The data mismatch of e-way bills with GST returns will lead to difficulties in preparing GST audits and annual GST returns.

6.     Comparison and reconciliation between returns

A very beneficial exercise for taxpayers, which will help not only in the process of filing annual returns but also in the case of GST audit. Compare GSTR-3B returns filed by taxpayers with GSTR-2A and GSTR-1 and ensure that all data match.

7.     Correct and revise your return before filing an annual return

GST return filers should ensure that all pending corrections in the monthly return are made on time. If this process is not carried out, it can lead to a discrepancy between the returns filed throughout the year and the annual returns. Therefore, all must be reconciled and any discrepancies must be removed before filing an annual return.

8.     Understand the provisions of the reverse-charge system

The government keeps issuing notifications regarding the provisions of the reverse-charge mechanism. Every business should ensure that they stay up to date with these provisions. Taxpayers should also note that input tax credits cannot be used when making reverse-charge payments and can only be paid in cash.

9.     Inform GST officials about changes in your business

All registered persons registered under the GST Act should inform the GST authorities of the changes made in the details given in respect of their registration. Such changes must be notified to the authorities within 15 days. The application should be submitted on the GST portal along with the required documents.

10.  Complete your GST audit for a turnover of over Rs 2 crore

Every registered dealer with a turnover of more than Rs 2 crore in a financial year will have to have his accounts audited by the CA or CMA. He has to submit his audited return, his audited accounts and a reconciliation statement.


1.     Pay tax under wrong GST head

Taxpayers sometimes make the mistake of paying taxes under the wrong GST head, or paying interest under the tax head, and so on. Extra caution should be exercised when making GST payments as GSTN does not allow the inter-user of taxes. Paying under the wrong head of tax will create unfavourable working capital.

2.     Classify zero-rated supply as nil rated supply and vice versa

This is a common error that users use to classify zero-rated supplies as nil rated and vice versa. Zero-rated supplies are supplies supplied to exports and SEZs, while nil-rated supplies are supplies on which the tax rate is 0%. The input tax credit cannot be claimed on a zero-rated supply, and therefore users should be careful when entering data into a GST return.

3.     Forget about filing your nill return

This is a very important point for taxpayers to ignore sometimes. If a business does not have transactions for a specific period of time, the user should not forget to file a NIL return for that period. This will enable the later filing of returns easily as GSTN does not allow the filing of returns in specific cases where returns of the previous period have not been filed.

4.     Apply incorrect tax rates

As suggested by the GST Council, the government regularly issues notifications with updated tax rates. All businesses are required to stay up to date with these rate changes and pay GST at applicable rates. There are also different rates for some goods and services depending on whether the input tax is claimed or not. Individuals issuing GST invoices should ensure that the appropriate tax rate is levied when an invoice is issued.

5.     Pay tax if you want to pay under reverse charge

This is for all businesses whose receipts are to be paid on GST reverse charge. Such a business must identify whether the recipient is required to pay a reverse charge and not to levy GST when issuing an invoice. This can save tax double payments, and cause unnecessary hassle when collecting taxes when the liability is on the recipient instead.

6.     Forget to pay tax on items sent on job-work (after the expiry of the certain period)

In the case of job-work, the main producer is liable to pay tax with applicable interest, if the goods sent to the job are not returned within the specified period (in case of input 1 year and in case of capital goods in 3 years). In the case of moulds and dies, jigs and fixtures, when disposed of as scrap, the job-worker or the main manufacturer are considered to pay tax, if the job-worker does not have GST registration.

7.     Claim the ineligible input tax credit

There are some cases where input tax credit cannot be taken such as - payment not made to suppliers within 180 days, input used partially for personal purposes, capital goods sold, free samples given to customers or business partners, destroyed goods etc. To keep up to date with the provisions of the input tax credit. Notices may be issued by the GST department in case of any misuse of an input tax credit.


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