Audit under GST-

• What is GST Audit ?

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.

Divided into following parts :

1. Threshold Limit for Audit

     

Every registered taxable person whose turnover during a financial year exceeds the prescribed limit [as per the latest GST Rules, the turnover limit is above Rs 2 crore] shall get his accounts audited by a chartered accountant or a cost accountant. He shall electronically file:

an annual return using the Form GSTR 9 by 31st December of the next Financial Year*,

the audited copy of the annual accounts,a certified reconciliation statement in the form GSTR-9C, 

reconciling the value of supplies declared in the return with the audited annual financial statement,and other particulars as prescribed.

2. Audit by Tax Authorities 

The Commissioner or any officer authorized by him, by way of a general or a specific order, may undertake GST audit of any registered person for such period, at such frequency and in such manner as may be prescribed. Audit may be conducted at the place of business of the registered person or in the office of the Commissioner or officer authorized by him. A notice will be sent to the registered person at least 15 days prior to the conduct of the audit. The audit shall be completed within a period of 3 months from the date of commencement of the audit. The Commissioner can extend the audit period for a further period of 6 months with reasons recorded in writing.

During course of GST audit, the authorized officer may require the registered person –

1. To afford him the necessary facility to verify the books of account or other documents as he may require.

2. To furnish such information as he may require and render assistance for timely completion of the audit.

On conclusion of GST audit, the officer shall inform the registered person within 30 days about the findings, his rights and obligations and the reason for such findings. Where the audit conducted results in detection of unpaid/short paid tax or wrong refund or wrong input tax credit availed, then demand and recovery actions will be initiated.

3. Special Audit :

The Assistant Commissioner may initiate the special audit, considering the nature and complexity of the case and interest of revenue. If he is of the opinion during any stage of scrutiny/ inquiry/investigation that the value has not been correctly declared or the wrong credit has been availed then special audit can be initiated.

A special audit can be conducted even if the taxpayer’s books have already been audited before.

The auditor will have to submit the report within 90 days. This may be further extended by the tax officer for 90 days on an application made by the taxable person or the auditor.

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

The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of special audit. Where the audit conducted results in detection of unpaid/short paid tax or wrong refund or wrong input tax credit availed, then demand and recovery actions will be initiated.