GST Audit

GST Audit is the process in which a qualified auditor examines a taxpayer's financial records to ensure GST regulations are complied with. The auditor examines books of accounts, invoices, GST returns, and other relevant documents.

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GST Audit - Overview:

Audit under GST is the process of examination of records, returns and other documents maintained by a taxable person. The purpose is to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess the compliance with the provisions of GST.

Mandatory GST AUDIT by professionals

  • If the annual turnover of a registered taxpayer is more than Rs.5 crore in a financial year, he is required to get his accounts audit every year.
  • Business with an annual turnover of More than Rs 5 crore, filing of GSTR-9C.
  • Registered person is required to furnish electronically through the common portal along with annual return (GST-9).

i. Audited annual accounts

ii. A reconciliation statement, duly certified, in prescribed FORM GSTR-9C.

Aggregate turnover= value of all taxable (interstate and intra state supplies )+ exempt supplies + export supplies of all goods and services.

  • The total turnover calculation must be PAN-based ,which means that once the turnover under the pan is more than than Rs 5 crore, filing of GSTR-9C.
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Types of GST Audit

  • Mandatory GST Audit (Section 35(5) Audit by professionals)
  • Departmental GST Audit (Section 65 Audit by Tax Authorities)
  • Special Audit (Section 66 Audit by Tax Authorities)

Departmental GST Audit by tax Authorities (u/s 65)

  • The place of business of registered person or in tax office.
  • The commissioner or any officer authorized(CA/CMA) by him.
  • The registered person shall be informed by way of a notice 15 working days prior to the conduct of audit in FORM GST ADT-01.
  • The audit by tax authorities shall be completed within a period of 3 months from the date of commencement of the audit, and such period is further extendable for a period of 6 months by commissioner for the reasons to be recorded in writing.
  • The proper officer shall, within 30 days, inform the registered person, whose records are audit, about

a. The findings,

b. His rights and obligations and

c. The reasons for such findings in FORM GST ADT-02.

Special Audit by Tax Authorities (u/s 66)

  • The registered person can be directed to get their records that include books of Account.
  • It shall be examined and audited by a chartered account or a cost account nominated by commissioner.
  • This examination can take place during any stage of scrutiny, inquiry, investigation or any other proceedings.
  • The Assistant manager commissioner can order for special audit. The commissioner will nominate the CA who will carry out the special audit.
  • The CA has to submit a report of the audit within 90 days. The assistant commissioner can also extend the period over 90 days for the application person for any sufficient reason.
  • In this procedure results in

i. Detection of tax not paid

ii. Short paid

iii. ITC wrongly availed or utilized

The taxable person will be given an opportunity of being heard in the findings of special audit. If the result in detection of unpaid/ wrong refund etc .The recovery will start against the registered person after this auditing.

Who will bear the expenses of the special audit?

The expenses for examination and audit including the auditor’s remuneration will be determined and paid by the commissioner.

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