Almost nobody loses GST money through fraud. They lose it through six ordinary mistakes, repeated monthly, discovered years later.
1. Claiming credit that is not in your GSTR-2B
Credit is limited to what your suppliers have actually declared. Your purchase invoice is not enough; the invoice must appear in your GSTR-2B, which happens only when the supplier files their GSTR-1.
If you claim on your books rather than on your 2B, you are claiming credit that may never materialise — and it comes back with interest.
The fix: reconcile the purchase register against 2B before filing 3B, every month. Anything not in 2B is a phone call to the supplier, not a claim.
2. Letting the deadline pass
Credit does not wait indefinitely. An invoice from one financial year has to be claimed by a cut-off in the next — broadly the November return of the following year, or the annual return, whichever is earlier.
An invoice found during a year-end clean-up eighteen months later is very often credit that has already lapsed. It is simply gone.
The fix: a quarterly sweep for unclaimed invoices, not an annual one.
3. Claiming on blocked items
Some credit is blocked by law regardless of business use — motor vehicles below a seat threshold, food and beverages, club memberships, health insurance except where mandated, works contract services for immovable property, goods lost or given as free samples.
Business purpose does not override the block. A vehicle bought entirely for the business still fails if it falls in the blocked category.
The fix: tag blocked categories in your expense heads once, so the bookkeeper never has to make the judgement twice.
4. Ignoring the 180-day payment rule
If you do not pay a supplier within 180 days of the invoice date, credit already taken must be reversed, with interest. You can reclaim it when you eventually pay — but the reversal is not optional in the meantime.
This one catches businesses that stretch creditors during a cash crunch. The squeeze costs more than it saves.
The fix: an ageing report on payables, reviewed monthly, with a flag at 150 days.
5. Not reversing on exempt supplies
If you make both taxable and exempt supplies, credit on common inputs has to be apportioned, and the exempt portion reversed. Businesses that add an exempt line mid-year often keep claiming in full without noticing the rule now applies to them.
The fix: whenever a new revenue line starts, ask whether it is exempt before the first invoice, not at year end.
6. Wrong GSTIN on the invoice
Credit attaches to a GSTIN. An invoice raised to your other branch, your personal name, or an old registration does not give you credit — it gives it to whoever is named.
The fix: give suppliers your GSTIN in writing at onboarding and check the first invoice from every new supplier.
The pattern behind all six
Every one of these is caught by the same monthly habit: reconcile 2B against the purchase register, list the differences, chase them. Twenty minutes a month against an assessment years later that nobody can reconstruct.
Software helps because it makes the reconciliation a report rather than a project — BizGST Pro captures GST on every expense and produces the summaries. But the habit is the thing.
If you are already behind, our GST desk reconstructs and reconciles lapsed periods, and answers notices where one has arrived.
General information, not tax advice. Provisions change; confirm treatment with your chartered accountant before filing.