Common GST Errors & How to Avoid Them

The introduction of the Goods and Services Tax (GST) has simplified India’s indirect tax system, but compliance under GST still remains challenging for many businesses, professionals, and beginners. From incorrect return filing to input tax credit mismatches, even small mistakes can result in heavy penalties, interest, or legal notices.

Understanding Common GST Errors & How to Avoid Them is crucial for business owners, accountants, and students pursuing careers in Taxation (Income Tax & GST). This article highlights the most frequent GST mistakes and provides practical solutions to help you stay compliant and stress-free.

1. Incorrect GST Registration Details

The Error:

Many taxpayers provide incorrect details during GST registration—such as wrong business address, nature of business, bank details, or PAN mismatch. These errors later create problems in return filing, refunds, or receiving notices.

How to Avoid It:

• Double-check all details before submitting the GST registration form.

• Ensure PAN, Aadhaar, and bank details are accurate.

• Update any changes through GST amendment immediately.

Professionals trained in Certified Corporate Accounting are better equipped to handle registration accurately and avoid future complications.

2. Delay in GST Return Filing

The Error:

Late filing of GST returns like GSTR-1 and GSTR-3B is one of the most common GST errors. Many small businesses miss deadlines due to lack of awareness or poor record-keeping.

How to Avoid It:

• Maintain a monthly GST compliance calendar.

• Use reminders or accounting software.

• File NIL returns even when there are no transactions.

Late filing attracts late fees and interest, increasing unnecessary financial burden.

3. Incorrect Reporting of Sales & Purchases

The Error:

Mismatch between sales reported in GSTR-1 and tax paid in GSTR-3B leads to notices from the GST department. Similarly, incorrect purchase entries affect ITC claims.

How to Avoid It:

• Reconcile sales data before filing returns.

• Match invoices with accounting records.

• Ensure accuracy while entering invoice details.

Hands-on training in SAP FICO (Finance & Controlling) helps professionals manage accurate financial reporting and reconciliation efficiently.

4. Wrong Claim of Input Tax Credit (ITC)

The Error:

Claiming ineligible ITC, excess ITC, or ITC without proper invoices is a serious GST violation. Many taxpayers claim ITC without matching it with GSTR-2B.

How to Avoid It:

• Claim ITC only if invoices reflect in GSTR-2B.

• Verify supplier compliance before claiming credit.

• Understand blocked credits under GST law.

Proper knowledge of Taxation (Income Tax & GST) ensures correct ITC utilization and avoids reversals and penalties.

5. Ignoring HSN and SAC Codes

The Error:

Using incorrect or missing HSN (goods) or SAC (services) codes leads to wrong tax rates and compliance issues.

How to Avoid It:

• Identify correct HSN/SAC codes applicable to your business.

• Regularly update codes as per GST notifications.

• Use accounting software to auto-populate codes.

Incorrect classification can result in short payment of tax or excess tax liability.

6. Not Issuing Proper GST Invoices

The Error:

Invoices without mandatory details like GSTIN, invoice number, tax breakup, or place of supply are considered invalid under GST.

How to Avoid It:

• Follow GST invoice format strictly.

• Issue invoices within the prescribed time limit.

• Maintain serial numbering and records properly.

Businesses trained under Certified Corporate Accounting standards maintain proper documentation and avoid such errors.

7. Failure to Reconcile GSTR-2B with Purchase Register

The Error:

Many taxpayers skip reconciliation between purchase register and GSTR-2B, leading to excess ITC claims or loss of eligible ITC.

How to Avoid It:

• Perform monthly reconciliation.

• Follow up with non-compliant suppliers.

• Reverse ineligible ITC promptly.

This practice is essential for smooth audits and avoiding GST notices.

8. Ignoring Reverse Charge Mechanism (RCM)

The Error:

Some businesses fail to pay GST under Reverse Charge Mechanism on applicable transactions such as legal services or unregistered suppliers.

How to Avoid It:

• Identify transactions covered under RCM.

• Pay tax under RCM within due dates.

• Claim ITC after payment, where eligible.

RCM mistakes are commonly noticed during departmental scrutiny.

9. Non-Compliance with E-Way Bill Rules

The Error:

Transporting goods without a valid e-way bill or incorrect details can result in penalties and seizure of goods.

How to Avoid It:

• Generate e-way bills for applicable movements.

• Ensure accuracy in vehicle and invoice details.

• Cancel unused e-way bills within time limits.

Understanding logistics compliance is an important part of GST training.

10. Ignoring GST Notices & Communications

The Error:

Many taxpayers ignore GST notices due to fear or lack of understanding, which worsens the situation.

How to Avoid It:

• Regularly check GST portal and registered email.

• Respond to notices within the given timeframe.

• Seek professional help when required.

Professionals trained in Taxation (Income Tax & GST) can handle notices effectively and protect businesses from legal trouble.

Conclusion

GST compliance is not just about filing returns—it requires accuracy, discipline, and continuous learning. Most GST mistakes occur due to lack of knowledge, poor accounting practices, or delayed action. Understanding Common GST Errors & How to Avoid Them helps businesses save money, avoid penalties, and build a strong compliance culture.

For students and professionals, gaining practical expertise through Certified Corporate Accounting, SAP FICO (Finance & Controlling), and Taxation (Income Tax & GST) courses opens doors to high-demand careers in finance and taxation.