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GST Audit -GST Tax Service Provider

GST Audit

Let's first have a basic concept of GST, GST audit, its need, and its importance before learning about its applicability and process. The indirect tax known as the "Goods and Service Tax" is imposed on the supply of products and services. Stopping the cascading effect of other indirect taxes is the primary goal of the GST in India. There are four different versions of GST in India: the Union Territory Goods and Service Tax (UTGST), the Integrated Goods and Service Tax (IGST), and the State Goods and Service Tax (CGST). If turnvover exceeds Rs 5 Cr is applicable. For your GST audit, no certification from a firm of chartered accountants is required. We are best GST Tax Service Provider in Pune & PCMC.

Applicability & Turnover Limit for GST Audit

According to section 35 of CGST Act, every registered person under GST whose aggregate turnover exceeds Rs. 5 (five) crore in the financial year is liable for GST audit. Registered person is required to file electronically through GST common portal along with annual return (GSTR-9) audited annual accounts and a reconciliation statement duly certified in Form GSTR-9C. Turnover limit for compulsory filing of GSTR 9 is Rs.2 crore whereas for GSTR 9C is RS.5 crore.


AggregateGST Turnover GSTR 9C Applicability GSTR 9 Applicability
Less than Rs. 2 Cr. Not Applicable Optional
Between Rs. 2 Cr to Rs. 5 Cr Optional Applicable
More than or equal to Rs.5 Cr Applicable Applicable

GSTR-9 :

GSTR 9 - Annual Return is basically consolidation of all GST returns. It includes consolidated summary details about turnover, ITC claimed, taxes paid, refund claimed, demands, etc. It is to be filed electronically on the GST portal or offline by the facilitation center.
Due date for filing GSTR 9 is 31st December of next financial year.

GSTR 9C

GSTR 9C - Reconciliation statement is self certified return by registered person. It contains a reconciliation statement and certification. GSTR 9C is an audit form for taxpayers similar to a tax audit report.
Due date for filing GSTR 9C is 31st December of next.

Turnover calculation for GST audit :

For GST, Aggregate turnover=Value of all taxable supplies(inter and intra state) + exempt supplies + export supplies of all goods & services.
Calculation of turnover for GST audit is to be done on a PAN India basis.

Items to be included in calculation of Aggregate turnover for GST audit :

  • All taxable supplies other than supplies applicable to RCM.
  • Supplies between different business verticals.
  • Export/ zero rated supplies value.
  • All taxes other than GST.
  • Exempt supplies.
  • Supplies of agent/ job worker on behalf of principal.

Items to be excluded in calculation of Aggregate turnover for GST audit:

  • Inward supplies i=on which tax is paid on RCM basis.
  • Taxes & cess under GST such as CGST, SGST, IGST, UGST.
  • Goods received from/supplied to job worker.
  • Schedule III supplies.

Penalty for GST Audit :

As of currently, no specific penalty is provided under the GST act. However, a general penalty of Rs.25,000 will be applicable for not filing GST audit.

Types of GST audits :

Mandatory GST audit: section 35(5) – Every registered person under GST whose aggregate turnover exceeds Rs. 5 (five) crore in the financial year is required to get his books of accounts audited by a chartered accountant or cost accountants. Taxpayer is required to file electronically-

  • Annual return in Form GSTR9.
  • Audited copy of annual accounts.
  • Certified reconciliation statement 9C.

Departmental GST audit : section 65– This audit is performed by tax authorities. In this commissioner or any officer authorized by him may conduct an audit of the taxpayer by giving notice of at least 15 days. This audit is need to get complete within 3 months from commencement of audit. Further commissioner may extend the time period if thinks fit.If the audit finds there is unpaid/ short payment tax or wrong refund/ITC is claimed then demand and recovery action will be taken.

Special audit : section 66- During any stage of scrutiny, inquiry or investigation, assistant commissioner (with prior order of commissioner) can order a registered person to get its books and records examined and audited by a Chartered Accountant or Cost Accountant nominated by the commissioner. The auditor (CA or CMA) has to submit a report within 90 days.If the audit finds there is unpaid/short payment tax or wrong refund/ITC is claimed then demand and recovery action will be taken.Expenses for audit including auditors remuneration will be determined and paid by commissioner.

Checklist for GST Audit

While conducting the GST audit, the taxpayer will check sales register, stocks register, purchase register, tax credit & ITC claimed, output tax, communication from department, orders, etc. Following points are to be kept in mind :

Reconciliation of GSTR 3B,GSTR 1 & GSTR 2A : Forms GSTR 9 & 9C should be filed only after reconciliation of 3B, 1, 2A and books maintained by taxpayers. Sometimes taxpayers try to claim extra ITC by manipulating figures so it is important to reconcile 3B with 2A.

Checking invoice format of invoice : Format of invoice plays an important role in GST and hence it needs to be followed very specifically. If any alterations are required, the auditor should advise the management about the same.

E-way bill requirements : E-way bill is one of the statutory requirements of the GST act. It is the responsibility of the auditor to verify e-way bills tally with invoices issued. Auditors should also check e-way bills are prepared for all consignments wherever applicable.

Reversal of ITC : According to provisions, non-payment of an invoice within 180 days requires the taxpayer to reverse the ITC claimed for that invoice. Auditor should check for such cases and verify the treatment given.