GST Audit
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Documents Required
- GST Registration Certificate
- Copies of GST Returns
- Tax Invoices and Bills of Supply
- Debit and Credit Notes
GST Audit
A GST audit is an examination of a taxpayer’s records, returns, and other documents conducted to verify the correctness of turnover declared, taxes paid, refund claimed, and input tax credit (ITC) availed. The audit ensures that the taxpayer complies with the provisions of the Goods and Services Tax (GST) law.
Types of GST Audits
Turnover-Based Audit (Statutory Audit)
Applicable if the taxpayer’s annual aggregate turnover exceeds ₹2 crore. The taxpayer must get their accounts audited by a Chartered Accountant (CA) or a Cost Accountant.
Departmental Audit
Conducted by tax authorities under Section 65 of the CGST Act. The department can conduct an audit at the taxpayer’s place of business or at the tax office.
Special Audit
Ordered by a GST officer under Section 66 of the CGST Act if there is complexity in the case or if the officer suspects under-reporting of taxes.
Key Points to Remember
Timeliness: Ensure all records are up-to-date and readily available for audit.
Accuracy: Double-check all reconciliations and calculations to avoid discrepancies.
Compliance: Address any compliance issues identified during the audit promptly to avoid penalties.
Professional Assistance: Consider engaging a CA or tax professional, especially for turnover-based audits, to ensure thorough preparation and representation.
Documents Required for GST Audit
GST Registration Certificate
Copies of GST Returns (GSTR-1, GSTR-3B, GSTR-9, GSTR-9C)
Sales and Purchase Registers
Tax Invoices and Bills of Supply
Debit and Credit Notes
Input Tax Credit (ITC) Ledger
E-way Bills
Bank Statements
Trial Balance and Financial Statements
Reconciliation Statements
Ledgers and Journals
Any Correspondence with Tax Authorities
GST Audit Process
1. Notification of Audit
- The taxpayer is informed at least 15 days before the audit’s commencement.
2. Preparation for Audit
- Document Compilation: Gather all relevant records, including sales and purchase registers, GST returns, invoices, and bank statements.
- Reconciliation: Reconcile GST returns with financial statements to ensure consistency and correctness.
- Review by CA: If turnover exceeds ₹2 crore, a CA reviews and certifies the accounts.
3. Conduct of Audit
- Verification: The audit team reviews the records to verify the accuracy of tax filings, ITC claims, and compliance with GST laws.
- Query Resolution: The taxpayer may need to provide clarifications or additional documents if discrepancies are found.
4. Audit Report
- Turnover-Based Audit: The CA or Cost Accountant submits an audit report in Form GSTR-9C, along with the audited financial statements, to the GST portal.
- Departmental/Special Audit: The tax authorities may issue a report detailing any discrepancies, along with the necessary tax demand or refund adjustments.
5. Post-Audit Actions
Compliance: If discrepancies are found, the taxpayer must take corrective action, which may include payment of additional tax, interest, or penalties.
Appeals: The taxpayer can appeal against any adverse findings or demand notices if they believe them to be incorrect.
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