Schema Validation Failed in GSTR 7: 9 Common Errors to Avoid

Seamless GST compliance is the ultimate goal for every business and it may be achieved through an error-free GSTR-7 return filing process. Filing GSTR-7 must be a task completed within each tax period. However, doing so may seem challenging, given the ever-changing/updating formats and regulations.

Perhaps, the schema validation failed in GSTR 7 or the annual reports have been mismatched. Even minute lapses may result in notices, which may in turn, impact the business’s working capital or reputation in general.

Refer to this blog to be aware of the 9 most common errors which come up inevitably, while filing the Form GSTR-7. Plus, it shall allow the taxpayer to undertake measures in order to avoid such errors through diligent compliance.

Identifying & Preventing Errors in Filing GSTR-7

Here is a list of the 9 most common mistakes which must be identified to possibly avoid them during accurate GSTR-7 submissions:

1. Reporting Under the Incorrect GSTIN

It is incredibly important to make sure that the taxpayer is reporting the TDS deductions/tax payments under the right GSTIN in Form GSTR-7.

Here’s is the impact that shall result otherwise and possible steps you can take to avoid the error:

 2. Mismatched Records of Annual Returns

Discrepancies in annual returns often arise from mismatched records, where monthly input figures reported across tax periods in GSTR-7 do not align correctly. Errors also pop up in the consolidated annual returns as filed under Form GSTR-9.

Here’s the impact and steps recommended for prevention for your reference: 

3. Reporting Under the Wrong Accounting Heads

In case the details are incorrectly reported under the wrong heads in Form GSTR-7, it may lead to interpretation difficulties and misclassification.

Refer to the table below to explore the impact and steps recommended for the prevention of such an error: 

 4. Calculation Errors in Reference to Interest & Late Fees

While filing the form GSTR-7, a mistake-free computation process must be prioritised. The accurate disclosure of late fees related to delayed GST payments and interest amounts is of utmost importance. Wrong calculations may lead to the piling of penal actions.

The table below discusses the impact and steps for prevention of such miscalculation errors: 

 5. File Validation Issues

An error may pop up during the generation of the JSON file which is to be uploaded on the GSTN portal during actual filing. Errors in the overall file structure or input details shall make it impossible for the uploaded file to get accepted.

Take a look at the table below to understand the impact and discover the steps for the prevention of such a mistake: 

 6. Discrepancies Detected in Tax Payment Details

Inaccurate breakup of values in the Form Table 3B (which may include cash as well as input tax credit), may result in adjustment-related issues. Debits from the cash ledger may not match with the bank statement records.

Refer to the table below to trace the impact of such an error and ways to prevent its occurrence: 

 7.  Reporting Under the Incorrect Supply Category

Errors in the classification of deductions under goods/services instead of the valid supply types may lead to a chain reaction of challenges, prompting further reconciliation for vendors.

Here is a table highlighting the impact of such a mistake and tips to prevent it: 

 8. Input Tax Credit & Liability Mismatch

When the input tax credit is reclaimed, the error may prop up. The output-related liability of the respective deductor as recorded in the annual returns may not match the aggregate of monthly deductions (as portrayed in Form GSTR-7 across the year). This is when the challenges may arise.

Refer to the table below to understand the impact of the error mistake and the steps you can take to prevent it: 

 9. Delayed Filing After the Due Date

Filing past the due date is one of the most common mistakes made by taxpayers. If one delays the filing of form GSTR-7, going beyond the 10th of the succeeding month, penalties are likely to result.

Here is an overview of the impact of said error mistake and steps you can undertake to avoid it: 

Conclusion

Filing the Form GSTR-7 accurately is of utmost significance in order to avoid the 9 common mistakes listed above. A critical error to be on the lookout for is the "schema validation failed in GSTR-7," which may occur when the JSON file doesn't align with the respective GST portal's schema requirements. Prevent this by ensuring proper formatting, and accurate data entry and validate the JSON file before uploading.

Plus, verify the deductee information, section codes as well as tax rates/amounts to bypass other common mistakes. Meticulously follow the GST guidelines to effectively file Form GSTR-7, and thus, minimise challenges and ensure a smooth GST compliance process.

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