What is GST Audit?
Audit implies an official assessment of an association's records, commonly by an autonomous body. It includes Examination of record, returns, and different reports.
GST audit will apply every year for those GST registered business having turnover in excess of 2 Cr. Every assessable person whose turnover during the financial year exceed prescribed limit( 2 Cr) shall get his accounts audited by a CA or Cost Accountant, he will electronically file annual return using Form Gstr-9 by 31st December of next Financial Year. Normally taxpayer is assessing his liability, pay tax file returns, to guarantee this an audit is required.
WHAT TO ENSURE IN GST AUDIT,
1. To guarantee turnover declared, Tax paid, Refund claimed, Input tax, and other compliance.
2.Whether Sales, Purchases, Stocks, Expenses, Input Tax Credit availed/utilized, Output tax paid or payable, E bills are correct or not.
DIFFERENT TYPES OF AUDIT
Turnover based audit. (Exceeds 2 cr)
CA / Cost Accountant appointed by the Taxpayer
Audit by GST authorities
1. General/Normal audit ordered by Commissioner
Commissioner of CGST/SGST or any ocer authorized by him.
2. Special Audit
Chartered Accountant/Cost Accountant nominated by Commissioner
I. TURNOVER BASED AUDIT
1. Value of all taxable turnover (Intra state and interstate)
Intra state and interstate taxable turnover includes
Supplies between separate business verticles
Goods provided to/get from job workers on principal to principal basis
Supplies of Agents/job workers on behalf of Principal
Intra state and interstate taxable turnover excludes
Inward supplies on which duty is paid under Reverse Charge Mechanism
Goods provided to or received back from a job worker
Activities which are neither stock of goods nor services
Document to file
1. Annual return using Form Gstr-9
2. Audited copy of annual accounts
3. Certified reconciliation statement in the form of Gstr-9
4. Reconciling the value of supplies declared in the return with audited Financial Statement
Eligibility of GST Auditor
RECTIFICATION AFTER RETURN FILING
After return furnishing taxpayer discover any incorrect details/omission he can rectify by payment of interest.
No rectification will be allowed after the due date for filing returns for the month of September or the date prescribed or actual date of filing the return whichever is earlier.
Auditor must report any duty liability pending for the payment by the taxpayer, recognized through reconciliation and observation made by conducting GST audit.
Taxpayer can settle taxes as recommended by the auditor.
CERTAIN OBLIGATION OF AUDITEE
The auditee must given the related books of records and documents.
Which must be kept up according to the provision under GST audit Rules.
Must give data and all the essential help to complete the timely audit
II. NORMAL AUDIT/GENERAL AUDIT
Commissioner of CGST/SGST or any official approved by him may conduct audit of taxpayer.
How will it start
Notice will be sent to auditee at least 15 days before.
Audit will be finished inside 3 months from the date of commencement of audit
Commissioner can extend the audit period for a further 6 months with reason recorded as a hard copy.
Obligation of Taxable person
On completion of audit, the official will inform the taxable person inside 30 days of commencement with details including:
- the findings
- the reasons
- and the privilege and commitment of taxable person arising out of such GST audit.
If the audit result in detection of unpaid/short tax paid, wrong refund, wrong Input Tax Credit availed,-demand and recovery actions will be initiated.
In this form of GST audit, the officer generally audits the documents on the basis of which accounts were maintained & returns were filed under GST audit rules. It includes:
Correctness of turnover
Exemption of deductions of claim
Rate of tax applied in respect to provide supply of goods and services
Input Tax Credit availed and utilized
Any other related issue.
III. SPECIAL AUDIT
The Assistant Commissioner may initiate the special audit,
1. Considering the nature and complexities of the case and
2. Interest of revenue
If he is of the belief during any stage of scrutiny/inquiry/investigation that the worth has not been accurately declared or wrong credit has been availed, then special audit can be start.
Special audit can be directed regardless if the taxpayer books have already been audited before.
The Assistant Commissioner with earlier approval of Commissioner can order special audit, carried out by a CA / Cost Accountant nominated by Commissioner.
Auditor should present the report within 90 days
This might be further extended by the tax officer for 90 days on an application made the taxable person
Taxable person will be given an opportunity of being heard in the finding of a unique audit
If the audit result in detection of unpaid/short tax paid, wrong refund, wrong Input Tax Credit availed,-demand and recovery action will be initiated.
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