Criteria and Requirement for GST Audit

The GST regime was introduced in India in the year 2017 by the Ministry of Finance and it took the taxation regime in India by storm as one of the biggest changes ever made. As part of the regime, every individual having registration under GST is required to get their accounts audited by a GST Auditor in the case for a particular financial year their turnover exceeds Rs. 2 Crore from selling the goods or services or both. The turnover for the GST Audit requirement is calculated based on the PAN for all the goods and services sold by the taxpayer computing to the prescribed threshold amount limit. This audit limit is the same for every taxpayer, be it in any part of the country. No special limit category has been prescribed for different states or union territories.

GST Audit Requirement

Requirement of GST Audit:

GST Audit Requirements are for the following reasons-

  1. Since, GST for quite some time had a self-assessment tax regime, so the GST Audit is required for assuring that the taxpayer has filed his taxes correctly and assessed the tax liability without any hitch.
  2. It involves evaluating and examining the documents, data, records and GST returns filed by the taxpayer.
  3. One of the reasons for the GST Audit Requirement for the taxpayer is to obtain a reasonable proof of the financial statement and whether they are free from any misstatements.

Furnishing of Documents under GST Audit:

The following documents are to be furnished by the taxpayer as GST Audit Requirement-

  1. Annual Return
  2. Copy of Audited Annual Accounts
  3. Copy of Form GSTR-9C which is a statement of reconciliation under GST

Calculation of Aggregate Turnover under GST:

For computing the aggregate turnover to fulfill the GST Audit requirements, the following sale must be included-

  1. Zero-rated supplies
  2. Any supplies made to the job work or agent on behalf of the principal
  3. Inter-state value of all the supplies
  4. Intra-state value of all the supplies
  5. Value of all the supplies that have been exported
  6. Value of all the supplies that are under exemption
  7. Supplies from job work on principal to principal basis

The following sales must be excluded from the aggregate turnover calculation-

  1. All the cess and taxes paid under the GST regime
  2. All the supplied and received goods from the job work
  3. Taxable supplies with applicable reverse charges

Accounts to be reviewed under GST Audit:

As part of the GST Audit Requirements, the following accounts are to be reviewed by the GST Auditor-

  1. Any changes that are made under the GST Laws during a particular financial period.
  2. E-way bill statements that have been generated for the financial period under audit.
  3. GST Expenses
  4. Output Tax Challan
  5. Purchase Register
  6. Sale Register
  7. Stock Register
  8. Availed and unutilized Input Tax Credit statements.

Forms to be filled under GST Return:

The following forms are to be filed as GST Audit Requirement in the GST Return-

  1. Form GSTR 9: This form is to be filed for providing the Annual Return of the taxpayer.
  2. Form GSTR 9C: This form is to be filed for certifying the Reconciliation Statement from a Chartered Accountant.

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    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 anil@ezybizindia.in.
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