GST Audit

Audit of Accounts by Chartered Accountant

GST Audit Limit: Every registered person, whose turnover during the financial year exceeds the prescribed “GST audit turnover limit” i.e., 2 crore rupees, shall get the accounts audited by a Chartered Accountant (CA) or a Cost and Management Accountant (CMA). Registered person who is required to get his accounts audited in accordance with section 35(5) shall submit electronically the Annual Return as per section 44 along with a copy of the audited statement of accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year. He shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in Form GSTR-9C along with annual return.

Every registered person, for facilitating the audit, shall keep and maintain his accounts to show the correct value in regards to:

  1. Production or manufacture of goods
  2. Inward supply of goods or services or both
  3. Outward supply of goods or services or both
  4. Stock of goods
  5. Input tax credit availed
  6. Output tax payable and paid
  7. Books of accounts point can be added

Audit by Tax Authorities

The Commissioner or any officer authorised by him, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed in a general or a specific order (Section 65 of CGST Act). The officers may conduct audit at the place of business of the registered person or in their office. The registered person shall be informed by way of a notice of not less than fifteen working days before the conduct of audit in Form GST ADT-01. The audit shall be completed within a period of three months from the date of commencement of the audit and can be further extended by a period not exceeding six months, by the Commissioner if he has a reason to believe that the audit cannot be completed in the given duration.

During the course of audit, the authorised officer may require the registered person,—

  1. to provide 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 audit, the proper officer will inform, the registered person, within 30 days, about the findings, his rights and obligations and the reasons for such findings in Form ADT-02. The officer along with his team will verify:
  3. Documents on the basis of which the books of account are maintained and the returns and statements furnished under the provisions of the Act and the rules made there under
  4. Correctness of the turnover
  5. Exemptions and deductions claimed
  6. Rate of tax applied in respect of the supply of goods or services or both
  7. Input tax credit availed and utilised
  8. Refund claimed
  9. Other relevant issues

If any error/mistake is noticed in any of the returns filed during the financial year while auditing the accounts, it can be rectified only in the annual return. For example, if any liability was missed to be reported in any of the months for the financial year, It has to be reported and paid along with interest at the time of filing the annual return pertaining to that year.

Obligations of the Auditee

The taxable person will be required to:

  1. Audit timely completion information & assistance.
  2. To give all the necessary documents of books of accounts and provide a necessary facility required.