11 Commonly Made Errors in GST Compliances

It is often said: Precaution is better than Cure.

It is advisable to follow the compliances and avoid any penalty and/ or prosecution.

Without going into the details of the section and rules, 11 commonly Ignored Compliances which can be detrimental to the interests of the dealers are listed below :

1. Display of GSTN on the main gate outside the office premises that is clear to every visitor.

2. Display of Gst Registration certificate at the prominent place of the business premises.

Pls Read Rule 18 of CGST Rules 2017 related to Registration below:

18. Display of registration certificate and Goods and Services Tax Identification Number on the name board.-

(1) Every registered person shall display his certificate of registration in a prominent location at his principal place of business and at every additional place or places of business.

(2) Every registered person shall display his Goods and Services Tax Identification Number on the name board exhibited at the entry of his principal place of business and at every additional place or places of business.

3. As per Section of CGST Act, 2017 Non-Compliance of the above can be penalized up to Rs.50,000.00.

Section 125. General penalty. –

Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty-five thousand rupees.

4. Mentioning of all business premises on GST RC.

For a dealer, a business premises means where all the prominent business activities are carried out or where all the board’s decisions are taken. But from Gst perspective, the business premises mean all those business addresses where any business-related activities are carried out. For example:

• If your goods are stored at a particular location, that specific place will be considered a Place of Business.
• If you have a part-time/full-time accountant and he/she edits the documents of your Business at his/her Home, even the Home will be considered a place of Business.
• If you store your Goods for a particular time with your Transporter, that place will be considered as a Place of Business.
• If the goods are dispatched from a job worker’s premises, that job worker’s address need to be endorsed and mentioned on the GST RC of the principal.
• If a dealer is registered with any E commerce operator and the dealer maintains his warehouse at different locations, and supplies goods from different locations, all such locations need to be mentioned on the GST RC.

Pls Read Section 2(85) of the Act

2. Definitions.-In this Act, unless the context otherwise requires,-

2 (85) “place of business”

Includes-

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or

(c) a place where a taxable person is engaged in business through an agent, by whatever name called;

5. Display of GST number is must at all the business locations/ premises as per point no. 4 above.

6. Make sure to mention exact/ principal business activity on the Gst RC for that place of business. For different GSTNs, there can be a possibility that one GSTN is more of a wholesaler, other GST number is into reseller, other GST number is a manufacturer; so the Gst RC should mention that business activity which is closest to the principal business activity.

7. Mentioning of Aadhar number is mandatory on the Gst portal of that Gst number. The Aadhar number should be of the business owner. Also, the phone number registered with Aadhar number should be linked with the Gst portal.

8. The Govt. will be using ADVAIT (Advanced Analytics in Indirect Taxation)– Tax 360^oat every stage of the business and is working to implement it quickly.

9. Minimum time Period for Retaining books of Accounts under GST

Every registered dealer must maintain the accounts books and records for at least 6 years (72 months). The period will be counted from the last date of filing of Annual Return for that year, unless otherwise extended. The last date of filing the the Form Gst 9 known as Annual return Is 9 months from end of 31^st March i.e. 31st December of the following year.

For example:

For the first GST financial year 2017-2018, the due date of filing the annual return was extended till 03^rd Feb/ 05^th Feb/ 07^th Feb; 2020. The books of accounts, documetary records of 2017-2018 must be maintained for 6 years.

The books should be maintained for One(1) year after the order of such proceedings/appeal has been passed; if the taxpayer is a part of any proceedings before any authority (First Appellate) or is under investigation.

10. Maintenance of Self invoice or Payment Voucher in case of RCM tax. This seems to be an ignored act where in, it is required to issue self-invoices and payment voucher.

Pls Read Section 31(3)(f) and 31(3)(g)

Section 31(3)

(f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of Section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;

(g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of Section 9 shall issue a payment voucher at the time of making payment to the supplier.

11. As per the provisions of GST Law, ITC is permissible post receipt of goods (except some exceptions such as receipts at job work premises, receipt by agent, etc). Ensure to check, if the date of claiming ITC is post challan/ GRN date. Care must be taken for the month end procurements, where supplier invoice may be date end of the month and goods are received in next month.

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