GST Audit

Types of GST Audit

GST Audit is an essential process for ensuring compliance with GST regulations. There are different types of GST audits based on specific circumstances:

1. Turnover-based Audit

• Conducted by: A Cost Accountant or Chartered Accountant appointed by the taxpayer.
• Circumstance that mandates it: If the taxpayer’s annual turnover exceeds INR 5 crores.

2. Normal Audit/General Audit

• Conducted by: CGST/SGST Commissioner or any empowered official.
• Circumstance that mandates it: Initiated by the Commissioner’s order after issuing a 15-day prior notice to the taxpayer.

3. Special Audit

• Conducted by: A Cost Accountant or Chartered Accountant authorized by the Commissioner.
• Circumstance that mandates it: Conducted under the order of the Deputy/Assistant Commissioner after the Commissioner’s approval.

Threshold for GST Audit

• Turnover Requirement: If the annual turnover of a registered taxable person exceeds INR 5 crores, they must get their accounts audited.
• Filing Requirements:
  • GSTR-9: Annual Return must be filed on or before 31st December of the subsequent financial year.
  • GSTR-9C: A Certified Reconciliation Statement to reconcile GSTR return values with audited financial statements.
  • Audited Annual Accounts and any other documents as specified.

Key Features of GST Audit

1. Timely Submission: GST audit reports and reconciliation statements must be submitted on time to ensure compliance.
2. Standardization: The audit follows a structured approach, making it easier for businesses to provide necessary records and details.
3. Cooperation Requirement: During the audit, businesses must fully cooperate by providing all required records, returns, and other documents for verification.

Benefits of GST Audit

1. Compliance Assurance: Helps businesses comply with GST law and avoid penalties.
2. Accuracy of Records: Ensures that businesses maintain accurate financial and tax records.
3. Transparency: The process fosters transparency and accountability in tax reporting and financial statements.
4. Early Detection of Errors: Identifies any discrepancies in tax returns or credit availed, which can be corrected promptly.

Documents Required for GST Audit

1. Annual Return: Form GSTR-9
2. Reconciliation Statement: Form GSTR-9C
3. Audited Financial Statements: Balance Sheet, Profit & Loss Account, and Cash Flow Statement.
4. Other Details: Any other documents or particulars required under GST law for reconciliation.