Types of GST Audit

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  • Last Updated on 5 November, 2022

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1. GST  Audit

Audit basically refers to examination of related records to verify compliance with related law. In same order a GST Audit is performed toverify the correctness of tax declaration and payment and refunds claimed and input tax credits availed by an assessed as per provisions under GST. The GST Audit have been defined under section 2(13) of Central Goods and Services Tax Act, 2017.

2. Types of Audit under GST

There are basically three kinds of GST audit that may be conducted under GST Audit Rules-
    • GST Audit performed by a Chartered Accountant
    • GST Audit performed by tax authorities
    • Special GST Audit
There is a strong GST audit mechanism in place under GST Audit Rules, however still there may be certain confusions related to when an assessee is liable to tax from multiple states, then he should be audited at one centralized unit or should undergo multiple audits. Manual Audits are more proficient or e-audits.
Taxmann’s GST Audit and Annual Return – F.Y. 2019-20 caters to handle the preparation and filing of GSTR 9, GSTR 9A/4, and GSTR 9C for FY 2019-20 which is currently supposed to be filed till 28th February 2021. This book serves as a ready referencer for all the professionals like CA and their Articles, CS, CWA, Advocates, etc. in handling audit and annual return assignments.

3. GST Audit performed by Chartered Accountant

As per provision in section 35(5) of GST Audit Rules, when turnover of a registered dealer goes over Rs.2 crores in a said financial year, then he needs his accounts and returns audited by a professional Chartered Accountant and must submit the copy of such a GST audit along with his GST annual returns.
 
Here is the GST Audit checklist of values to be maintained by a registered person to comply with GST Audit Rules –
 
      • The production or manufacture of goods
      • Inward supply of goods or services or both
      • Outward supply of good or services or both 
      • Stock of goods
      • Input tax credit availed
      • Output tax that is payable or already paid
      • Books of accounts point

4. GST Audit by Tax Authorities

Commissioner of CGST/SGST or any other GST Officer performs this kind of GST audit, who have been authorized by the commissioner. The frequency and manner of such a GST audit can be prescribed later. To start this kind of GST audit, a notice will be sent out to auditee, at least 15 days in advance and such a GST audit shall be completed within 3 months from the date of commencement of an audit. However, a commissioner can extend the period of such a GST audit further by six months with valid reasons which must be recorded in writing.
 
Such a GST audit brings certain obligations on the auditee as mentioned below-
 
    • The auditee must facilitate the related books of accounts and other documents which must be maintained as per provisions under GST Audit Rules.
    • The auditee also must give information and all the necessary assistance to complete the timely audit.
The findings of such a GST audit are notified to auditee by a GST Officer within 30 days of commencement with details including the findings, the reasons and the rights and obligations of the taxable person arising out of such a GST audit in Form ADT-02. When the GST audit results find an unpaid or short paid tax or wrong return filing of wrong input tax credit being availed, then GST Audit process of demand and recovery actions are initiated.
 
In this form of GST audit, the officer generally audits the –
 
    • Documents on basis of which the accounts were maintained, the returns were filed under GST Audit Rules
    • Correctness of the turnover
    • Exemptions of deductions of claims
    • Rate of tax applied in respect to supply of goods and service
    • Input tax credits availed and utilized
    • Refunds claimed
    • Any other related issue.

Dive Deeper:
All about GST Audit you should know
GST Audit Checklist, Rules & Applicability
Can GST Practitioners conduct GST Audit?

5. Special Audits

A chartered accountant does this kind of GST audit as per directions received from the GST Officer of not below the rank of Assistant Commissioner, if he declares that the values have not been declared correctly and/or credits availed in not within the normal limits. The CA or CMA for such a GST audit is nominated by the commissioner. The officer shall issue such direction in Form GST ADT-03 to the registered dealer to get his records including his books of accounts to be examined and audited by a professional CA or CMA within a period of ninety days from the day of passing such an order. This period could further be extended by additional ninety days.  The commissioner pays the expense of such a GST audit and examination. On conclusion of this special GST audit the findings have communicated the auditee in Form GST ADT-04.

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