Comprehensive Check List for GST Audit

As we all are aware that as per provisions of GST Act and Rules, now every registered dealer having an aggregate turnover of more than Rs 2 crore need to get GST Audit completed on or before 30th June 2019 and submit an online report before said date.

In this article, we have tried to provide a brief checklist of areas which need to be checked by the auditor.

EzyBiz India Consulting LLP provides expert GST Audit Service for multinational and domestic clients.

Before completion of the GST Audit, GST annual return needs to be prepared and filed.

Following areas need to be checked at the time of GST Audit.

  • Whether aggregate Turnover has been computed correctly.
  1. All Taxable supplies included
  2. All exempt supplies included
  3. Export of goods or services
  4. Interstate supplies included for all same PAN
  5. Value of inward supply on which tax is paid on RCM excluded
  6. Central tax, State tax, Union territory tax, integrated tax, and cess excluded.
  • Transitional Credit Under GST

Whether transitional credit from existing regime has been carried forward to the GST regime using form GST TRAN-1 in accordance with the provision laid down in Sec. 141 – 143 of CGST Act 2017.

  • Treatment of Goods sent for job work before 01st July 2017
  1. Whether goods sent for job work before 1st July 2017 has been brought back to the principal place of business within 6 months from the appointed day as per provisions of section 141 of the CGST Act 2017
  2. In case goods are not brought back within the aforesaid timeline, whether input tax credit has been recovered as per section 142(8)(a)
  • Treatment of Goods sent on approval before 01st July 2017
  1. In case of goods which are sent on approval basis not earlier than six months before the appointed day are rejected or not approved by the buyer, whether such goods are brought back to the place of business of the seller within 6 months from the appointed day as per Section. 142(12) of CGST Act 2017.
  2. In case aforesaid goods are returned after a period specified above and are liable to GST, Tax shall be payable by the person returning such goods.
  3. In case aforesaid goods are not returned within the period specified above and are liable to GST, Tax shall be payable by a person who has sent the goods on approval basis.
  • Maintenance of proper Invoice, Documents, and Records
  1. Whether unique serial numbers have been maintained for GST Tax Invoice.
  2. Whether HSN code has been properly mentioned in invoice like for turnover between Rs 1.5 crore and Rs 5 crore, 2 digit HSN code required and for Turnover of more than Rs 5 crore, 4 digit HSN code is required.
  3. Whether Tax Invoice and other documents are issued as per Sec. 31 of CGST Act 2017.
  4. Whether at the principal place of a business proper account of the production of goods, provision of services, in a ward and outward supply of goods or services or both and stock records are maintained.
  • Computation of Input Tax Credit under GST
  1. Whether input tax credit has been computed correctly.
  2. Whether while doing a valuation of a closing stock, calculation of the input tax credit taken on raw material, consumables, semi-finished goods has been made.
  3. In the case of capital goods, other than the building, either depreciation can be claimed or input tax credit can be claimed and not both.
  4. Whether in case of failure to make payment either in full or part by registered recipient to registered supplier within 180 days from date of invoice, registered recipient has reversed the proportionate input tax credit to the extent of such non-payment as per section 16(2) of CGST Act read with Rule 37(1) of CGST Rules 2017
  5. In a case where input was partly used for making taxable supplies and partly for exempt supplies or where input used partly for business purpose and partly for a non-business purpose, the proportionate amount of ITC used for exempt supplies + non-business purpose shall be reversed by the recipient.
  6. Whether inward supply transaction falls within the ambit of a blocked input tax credit.
  • Treatment of Job Work under GST
  1. Whether challan details have been included in Form GST ITC-04 with respect to goods dispatched to job worker or received from job worker during a quarter as per Rule 45(3) of CGST Rules 2017.
  2. Whether in case of an ISD, the input tax credit has been distributed to the recipients in the same month it is available for distribution as per Rule 39 of CGST Rules 2017.
  3. Whether procedure prescribed under section 20 of CGST Act 2017 read with rule 39 followed for distribution of ITC to a recipient in case of ISD.
  4. Whether proper reconciliation of input tax credit auto-populated has been done with books.

It may be noted that aforesaid list is just illustrative and depending upon size, volume and complexities of an organization, Goods and Service Tax Audit checklist may be modified or updated.

Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or