Everything You Need To Know About Gst Audit

GST (Goods and Service Tax) is a one tax regime impelled by Government to promote a unitary basis of transacting business in India. It enables every assessee to self-assess his tax liability & file timely returns to government without any major intervention of any tax official. As the regime majorly stresses on self-assessment procedures, it puts up a need for a rigorous audit mechanism, which will ensure effective measurement and compliance of all the legal associated provisions by every taxpayer.

As per section 2(13) of the CGST Act 2017, Goods and Service Tax Audit means the examination of records, returns and other documents maintained or furnished by the registered person under the Goods and Service Tax Acts or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of the GST Acts or the rules made there under;


‘GST’ to simplify the formerly practised audit procedures, distinguished audit of Goods and Service Tax returns into three types :

First: In this audit type every registered person whose aggregate turnover during a financial year exceeds 2 Crore has to mandatorily furnish a copy of the audit records along with the reconciliation statement & FORM GSTR-9C duly attested and certified by a Chartered Accountant or a Cost Accountant to the tax department.

Second: Like normal audits, the Commissioner, legal representative or any officer authorised can undertake audit of any registered person for such period, at such frequency and in such a manner as prescribed.

Third: This is a Special Audit type ,in this a registered person can be anytime directed to get his records audited by a Chartered accountant or Cost accountant during inquiry, scrutiny, investigation or any other proceedings depending on complexity of case.


Goods and Service Tax Audit Procedure Rules 2017

  • The period of audit to be conducted under subsection(1) under section 65 shall be a financial year or multiples thereof.
  • Once it is decided to undertake audit of a registered person, the proper officer shall issue a notice in FORM GST ADT-01 in accordance with provisions of section 73 sub-section (3).
  • The proper officerauthorised to conduct audit shall with the assistance of the team of officers, verify the documents , records and books of accounts maintained and returns furnished under provisions of the Act, can verify the accuracy of stated turnover, exemptions and deductions claimed, the rate of tax applied in respect of the supply of goods or services or both, the input tax credit availed and utilised, refund claimed, and other relevant issues and record the observations in his audit notes.
  • The proper officer may informthe registered person of the discrepancies noticed, or any errors observed in audit and may say the person to file his reply.
  • Concluding the audit, the proper officer within 30 days shall inform the audit scrutiny/findings to the registered person in FORM GST ADT -02 (Section 65(6))


 Special GST Audit Rules

  • In cases where any officer below the rank Assistant Commissioner, is of the opinionthat any value declared or credit availed is not appropriate by the registered person, he shall issue a direction in Form GST ADT- 03 to to get his records audited by a Chartered Accountant or Cost Accountant .
  • The CharteredAccountant or Cost Accountant so nominated has to submit a report of such audit within 90 days duly signed and certified by him to Assistant Commissioner. On application with sufficient reason, the said professional nominated or the registered person the period can be extended from 90 days by Assistant Commissioner.
  • The expenses of the said examination and audit of records including the remuneration of Chartered Accountant/Cost Accountant so involved shall be determined and paid by the Commissioner.
  • Concluding the special audit, the registered person shall be informed of the omissions/findings of special audit in FORM GST ADT -04.


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