Top 10 GST Mistakes Businesses Make & How to Avoid Them

Top 10 GST Mistakes Businesses Make and How to Avoid Them

Learn How to Stay Compliant, Avoid Penalties & Simplify GST Filing

Since the introduction of the Goods and Services Tax (GST), businesses across India have been adapting to this new indirect tax system. While GST has simplified the overall tax structure, many businesses—especially MSMEs and startups—still struggle with compliance. Even minor mistakes in GST filing or invoice handling can lead to penalties, loss of Input Tax Credit (ITC), or even legal notices.

In this blog, we’ll break down the top 10 common GST mistakes and provide simple, practical tips to avoid them — so you can stay compliant and stress-free.

1. Incorrect GST Registration Details

Many businesses rush through the registration process and end up entering incorrect business details, such as PAN, address, or business nature. These errors can create issues during GST return filing or audits.

How to Avoid:

Double-check all business details before submitting the GST registration.
If you’ve already registered incorrectly, apply for amendments through the GST portal immediately.
Use professional accounting support like Trakintax to ensure error-free GST registration and compliance.

2. Missing or Wrong GST Invoicing Format

A common GST mistake is not following the correct invoicing format not following the correct invoicing format or missing mandatory details such as GSTIN, HSN/SAC codes, or tax breakup.

How to Avoid:

Use GST-compliant invoicing software.
Make sure your invoices include:
- a. Supplier and recipient GSTIN
- b. Invoice number and date
- c. Taxable value and GST amount
- d. HSN/SAC codes
Conduct monthly invoice checks with your accountant.

3. Delayed or Missed GST Return Filing

Many businesses forget or delay filing GST returns (GSTR-1, GSTR-3B, etc.), leading to heavy late fees and blocking of Input Tax Credit.

How to Avoid:

Mark return due dates on your business calendar.
Use automated GST reminders or assign this task to your accountant.
Partner with Trakintax’s GST filing experts, who ensure on-time filing and 100% compliance every month.

4. Incorrect Input Tax Credit (ITC) Claim

One of the biggest mistakes under GST is claiming ineligible or mismatched ITC. Businesses often overlook supplier filing errors, leading to ITC mismatches during GST reconciliation.

How to Avoid:

Reconcile GSTR-2B with purchase invoices monthly.
Claim ITC only when your supplier has filed their returns.
Avoid claiming ITC on personal or non-business expenses.

5. Not Reconciling Sales and Purchase Data

Ignoring reconciliation between GSTR-1, GSTR-3B, and GSTR-2B leads to mismatched data — a red flag for GST audits and notices.

How to Avoid:

Perform monthly reconciliations.
Use Excel or automated GST reconciliation tools.
Take the help of Trakintax’s GST review service to cross-verify all entries and prevent mismatches.

6. Ignoring Reverse Charge Mechanism (RCM)

Many small businesses are unaware of RCM applicability, especially on services like freight, security, or legal consultation.

How to Avoid:

Identify transactions where RCM applies.
Maintain a proper RCM register for easy tracking.
Pay RCM liability monthly and claim ITC accordingly.

7. Not Updating Business Information on GST Portal

If your business address, nature of business, or authorized signatory changes — but you don’t update it on the GST portal, you may face non-compliance penalties.

How to Avoid:

File amendment requests within 15 days of change.
Keep all updated documents (rent agreement, electricity bill, etc.) ready.

8. Mixing Taxable and Exempt Supplies

Businesses that deal in both taxable and exempt goods/services often fail to properly segregate them, leading to inaccurate GST returns and ITC claims

How to Avoid:

Maintain separate records for taxable and exempt supplies.
• Identify proportionate ITC reversal if dealing with both.

9. Not Keeping Proper GST Records

Under GST law, businesses must maintain books and records for at 6 years. Many fail to preserve invoices, ledgers, and e-way bills properly.

How to Avoid:

Store all GST-related data digitally and in backup drives.
Use cloud-based accounting systems.
Get a monthly GST compliance review from Trakintax.

10. Ignoring GST Audit or Notices

Many businesses ignore GST notices or audit calls, thinking they can handle them later — this can worsen the situation.

How to Avoid:

Respond to notices within the prescribed time.
Maintain supporting documents for all transactions.
Consult a qualified GST consultant (like Trakintax) for professional representation and compliance support.

Quick Table: GST Mistakes vs. Easy Fixes

Common GST Mistake	Impact on Business	Quick Fix
Late GST Return Filing	Penalties & blocked ITC	File before due date or automate filing
Wrong Invoicing	Legal issues during audit	Use GST invoice templates
Wrong ITC Claim	ITC reversal + interest	Match GSTR-2B before claiming
Ignoring RCM	Penalty under RCM provisions	Identify and record RCM transactions
Non-Reconciliation	Mismatch notices from GST dept.	Monthly reconciliation of GSTRs

Pro Tip: Plan GST Compliance with Experts

Staying GST compliant is not just about avoiding penalties — it’s about building financial discipline. Regular filing, correct ITC claims, and timely reconciliations create a strong financial foundation for your business.

At Trakintax, our GST experts offer:

Monthly and annual GST return filing
GST registration and amendment support
ITC reconciliation and audit handling
End-to-end GST advisory services

Contact Trakintax today to ensure 100% GST compliance and save valuable time and money.

Final Thoughts

GST compliance doesn’t have to be complex. By avoiding these common mistakes and following simple preventive measures, businesses can:

Reduce compliance costs
Avoid penalties
Maintain better cash flow

Whether you’re a startup, MSME, or growing enterprise, staying updated and organized under GST can help your business thrive.

Mobile: 9358072247

Gmail: trakintax@gmail.com