What is GST Audit?

AUDIT 

Audit implies an official assessment of an association's records, commonly by an autonomous body. It includes Examination of record, returns, and different reports.

GST AUDIT

GST audit will apply every year for those GST registered business having turnover in excess of 2 Cr. Every assessable person whose turnover during the financial year exceed prescribed limit( 2 Cr) shall get his accounts audited by a CA or Cost Accountant, he will electronically file annual return using Form Gstr-9 by 31st December of next Financial Year. Normally taxpayer is assessing his liability, pay tax file returns, to guarantee this an audit is required. 

WHAT TO ENSURE IN GST AUDIT, 

1. To guarantee turnover declared, Tax paid, Refund claimed, Input tax, and other compliance. 

2.Whether Sales, Purchases, Stocks, Expenses, Input Tax Credit availed/utilized, Output tax paid or payable, E bills are correct or not.

DIFFERENT TYPES OF AUDIT   

I. TURNOVER BASED AUDIT
Turnover includes: 

1. Value of all taxable turnover (Intra state and interstate)  

2. Exempted 

3. Export

Intra state and interstate taxable turnover includes

• Supplies between separate business verticles 

• Export/Zero rated 

• Goods provided to/get from job workers on principal to principal basis 

• Supplies of Agents/job workers on behalf of Principal
  
  Intra state and interstate taxable turnover excludes 

• Inward supplies on which duty is paid under Reverse Charge Mechanism 

• Goods provided to or received back from a job worker 

• Activities which are neither stock of goods nor services

Document to file
1. Annual return using Form Gstr-9 

2. Audited copy of annual accounts 

3. Certified reconciliation statement in the form of Gstr-9 

4. Reconciling the value of supplies declared in the return with audited Financial Statement

Eligibility of GST Auditor 

• Internal auditor can not be appointed as GST auditor 

• GST Practitioner can not be appointed as GST auditor 

RECTIFICATION AFTER RETURN FILING

After return furnishing taxpayer discover any incorrect details/omission he can rectify by payment of interest. 

No rectification will be allowed after the due date for filing returns for the month of September or the date prescribed or actual date of filing the return whichever is earlier.

AUDITOR FINDINGS 

Auditor must report any duty liability pending for the payment by the taxpayer, recognized through reconciliation and observation made by conducting GST audit. 

Taxpayer can settle taxes as recommended by the auditor. 

CERTAIN OBLIGATION OF AUDITEE 

The auditee must given the related books of records and documents. 

Which must be kept up according to the provision under GST audit Rules. 

Must give data and all the essential help to complete the timely audit

II. NORMAL AUDIT/GENERAL AUDIT 

Commissioner of CGST/SGST or any official approved by him may conduct audit of taxpayer. 

How will it start 

Notice will be sent to auditee at least 15 days before. 

Audit will be finished inside 3 months from the date of commencement of audit

Commissioner can extend the audit period for a further 6 months with reason recorded as a hard copy.

Obligation of Taxable person 

• Provide necessary information to verify the books of accounts. 

• To give the information & help for timely completion of audit. 

On completion of audit, the official will inform the taxable person inside 30 days of commencement with details including:

- the findings 

- the reasons 

- and the privilege and commitment of taxable person arising out of such GST audit. 

If the audit result in detection of unpaid/short tax paid, wrong refund, wrong Input Tax Credit availed,-demand and recovery actions will be initiated. 

In this form of GST audit, the officer generally audits the documents on the basis of which accounts were maintained & returns were filed under GST audit rules. It includes: 

• Correctness of turnover 

• Exemption of deductions of claim 

• Rate of tax applied in respect to provide supply of goods and services 

• Input Tax Credit availed and utilized 

• Refund claimed 

• Any other related issue. 

III. SPECIAL AUDIT 

The Assistant Commissioner may initiate the special audit, 

1. Considering the nature and complexities of the case and 

2. Interest of revenue 

If he is of the belief during any stage of scrutiny/inquiry/investigation that the worth has not been accurately declared or wrong credit has been availed, then special audit can be start. 

Main points 

• Special audit can be directed regardless if the taxpayer books have already been audited before. 

• The Assistant Commissioner with earlier approval of Commissioner can order special audit, carried out by a CA / Cost Accountant nominated by Commissioner. 

• Auditor should present the report within 90 days 

• This might be further extended by the tax officer for 90 days on an application made the taxable person 

• Taxable person will be given an opportunity of being heard in the finding of a unique audit 

• If the audit result in detection of unpaid/short tax paid, wrong refund, wrong Input Tax Credit availed,-demand and recovery action will be initiated.

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