10 Common Mistakes Everyone Makes at the time of GST Registration.

The step of implementing GST in India was a historical move, as it marked a significant indirect tax reform in the country. Almost four and a half years ago, GST replaced 17 local levies like excise duty, service tax, VAT and 13 cesses. It is now paving the way for a common national market and Indian goods are also expected to be more competitive in international and domestic markets. With the motive of “One Nation One Tax”, this tax provision made the compliance procedure more transparent, seamless, and intuitive.

Once You become eligible for registration under GST, you must apply for a unique GSTIN from the GST Portal. Online GST registration is required by every registered taxpayer in order to collect and pay GST on the outward supplies i.e. sales and for claiming ITC on the inward supplies i.e. purchases.

Due to a lack of deep knowledge, Taxpayers and Tax Practitioners both commit some errors or mistakes at the time of the online GST registration process. GST commenced in 2017 and since then taxpayers are still committing some mistakes. In this article, we are discussing these common mistakes which we do knowingly or unknowingly during the online GST registration process.

Common Mistakes at the time of online GST Registration

1. Lack of knowledge about various registration types

There are various online GST Registration types available under the GST Act. Types of registration depend on the nature of the business. Undergoing the registration procedure is difficult without recognising its different forms. That’s why it is necessary that we should be aware of these types and thus acquire a better idea regarding the difference and benefits before selecting the suitable one.

2. Register your own phone number and email id with the GST portal

Whenever you apply for online GST registration on the GST portal or get it registered through any other person, your number should be registered with the GST portal so that any email or message sent by the GST department may be received directly by you.

3. Mentioning HSN and SAC codes for a supply of goods/services after the registration.

Basically, under GST, Goods are classified based on the Harmonized System of Nomenclature (i.e, HSN) and Services are classified based on Service Accounting Codes (i.e., SAC).

Notably, HSN is an internationally adopted system of classifying goods. Whereas, SAC is the nomenclature developed by the Goods and Services Tax council. Thus, the HSN/SAC mentioning requirement is a must in tax invoicing.

4. Satisfying all the GST return filing for avoiding unnecessary blocking

Ignoring timely filing of GST returns may lead to arising unnecessary consequences. You will also be liable to pay interest and a late fee if online GST return filing is not done within the due date. This also can lead to the blocking of certain facilities. For instance, the GSTR-1 return filing facility will be blocked for taxpayers who have not filed GSTR-3B for the previous two return periods. The restriction of the E-Way bill will also be applicable in case of two consecutive GST returns like GSTR 3B are not filled.

Timely and proper online GST return filing benefits taxpayers at the time of seeking loans from banks or financial institutions. Taxpayer’s credibility is evaluated based on his GST returns.

Hence, being an honest citizen of our country and to get our records clean, we must get it filed within the given time period.

5. Not having Key Documents handy

Not having all relevant documents in hand while registration can also lead to hindrances. Below is the list of documents that are required.

Documents required for online GST registration -

➢ PAN of the Applicant

➢ Aadhaar card

➢ Proof of business registration or Incorporation certificate

➢ Identity and Address proof of Promoters/Director with Photographs

➢ Address proof of the place of business

➢ Bank Account statement

➢ Digital Signature

➢ Letter of Authorization/Board Resolution for Authorized Signatory

6. Checking of availability of ITC

In order to avail of the input tax credit under GST, the registered taxable person needs to satisfy all the conditions prescribed under section 16(2) of the CGST Act, 2017. A taxpayer should always insist on the right ITC. He should pay attention to the blocked ITC which is not allowed under Section 17(5) because ineligible credits are subject to reversal along with interest due on it.

7. Improper Knowledge about the GST Rates.

The GST Council meets from time to time to revise the GST rates for various products. The GST rates for various products are subject to change from time to time without prior information. Therefore you must keep up with the current news related to GST rates.

8. Confusion between GST returns.

This is another common mistake. Every GST return filing form has its own purpose. Thus, it is important to know the purpose of various GST Returns and get familiar with all. It is advised that you should get connected with your GST Consultant or advocate in the initial stage after the registration.

9. Not having GST Number on view at the Business Premises

Every taxable person is required to keep his/her GSTIN number on view like on name board or sign board of business and is also required to display his registration certificate in business premises so that a purchaser can easily find out whether a person is registered or not. This is the legal requirement and hence not following this can lead to fines.

10. Non Filing of GSTR-10 for cancellation of registration.

In view of starting a new business people take registration but not everyone gets successful in having a good and sustainable business. So these people finally decide to surrender the GST number they have taken but in this case, due to lack of knowledge or their forgetfulness, they do not file Final Return, GSTR-10. GSTR-10 has to be filed within the prescribed time limit after the cancellation of the GST number otherwise you’ll be liable to fines and penalties

Final Thoughts

Above discussed errors are some of the most common mistakes which are often seen by individuals. It is highly important to comply with all the guidelines laid down under the GST law. It is advised that whenever you are in any kind of doubt, you should consult your GST Consultant or advocate.