The newly incorporated provision, Section 144 of the Companies Act, 2013 has restricted Auditor not to render certain types of services. One of these restricted services has been mentioned in Section 144(h) that states the Management Services. However what is constituted in this has not been stated in the section or in the act itself. If we think about the management services, it is a common understanding that it consist of all the services or work that are undertaken by a company’s management.
Since, we know that GST Audit Service is an audit stated by the statute. So, here the applicability of Section 144 and Section 144(h) is not possible. This means that statutory auditor appoint can be appointed as a GST Auditor for a company.
Who can be appointed as GST Auditor?
- Chartered Accountants: As per Section 6 of the Chartered Accountant Act, it has been stated that any member of Institute of Chartered Accountants of India (ICAI) can practice in India or in foreign countries only after receiving a practice certificate from the institute. Also, the Section 35(5), Section 44(2) of CGST Act, 2017 read with Rule 80(3) of CGST Rules, 2017 states that accounts of a registered person is to be audited by a Chartered Accountant.
If we consider the above mentioned definitions and provisions then this implies that a Chartered Accountant is liable to be appointed as GST Auditor in a company.
- As per the GST Laws, it has been mentioned that two or more Chartered Accountants can be appointed as GST Auditors in the company by the registered person. They are also called as Joint Auditors and together conduct the GST Audit of the company. SA 229 states the responsibility of Joint GST Auditors.
- The person having Goods and Services Tax (GST) Registration can also for different branches or divisions or units or additional business place, appoint separate auditors. In this case the GST Auditor appointed for the principal place of business, has to submit a report or certificate to the company’s management for conducting the GST Audit.
Who cannot be appointed as GST Auditor?
- The Institute of Chartered Accountants of India (ICAI) have already clarified that any person who is member of the same but practicing part time cannot be entitled to perform the attested functions of a Chartered Accountant. This implies that the GST Audit being one of the attested functions cannot be conducted by any such member which means they cannot be appointed as GST Auditor.
- It has been clarified in the CGST Act, 2017 that any person who has been already an employee of the company as a Chartered Accountant cannot be appointed as GST Auditor. Because GST Audit is a statute based independent audit work, which has to be carried out in an unbiased way, for which an external person must be appointed as GST Auditor.
- It has also been specified that Internal auditor of a company cannot be appointed as GST Auditor in the same company as GST Audit is a statute based audit and demands independent and unbiased conduction.
- Under the GST Laws it has been specified that any Chartered Accountant who is in debt for Rs.10000 or more to the registered person or company, then he may not be appointed by the company or the person as GST Auditor.