A Beginner’s Guide to GST Audit in India | Process of GST Audit

How To Do GST Audit In India

GST Audit: Meaning

GST Audit is a process in which all the documents, records and returns maintained and filed by taxpayers is being examined by officials. It was formulated by the taxation authorities to keep a check that the registered entities are paying appropriate GST or proper refunds are being claimed or not.

Also Read: An overview of GST Audit in India

Purpose of having a GST Audit:

GST Audits are being held for the purpose of verifying the authenticity of the documents and information furnished by the taxpayer regarding mentioned turnover, taxes paid, Input Tax Credits availed and the refunds claimed. It is done to check whether the taxpayer is compliant with the laid GST laws or not.

Who must have GST Audit:

  • All the business owners having a turnover of above 2 crores (as given in the GST act) during a fiscal year are liable to have a GST Audit. This GST Audit turnover limit is same for all the registered taxpayers all over India. GST Audits are taken state wise as there are separate GST Act for different states thus rules are different for GST Audit in different states.
  • Normal audit can be conducted by the CGST/SGST commissioner or a person appointed by him at instances and situations as prescribed the GST Act.
  • Also, Special GST Audit can be conducted by the tax department as and when they feel or right.

Who can be Appointed for GST Audit:

GST Audits can be conducted or done by any of the following persons appointed as GST Auditor :

  • Chartered accountants
  • Cost accountants
  • Two or more chartered accountants acting as joint auditors
  • Statutory auditors appointed as GST Auditor
  • Different auditors for different divisions/branches.

Who cannot Appointed for GST Audit:

The following persons cannot be appointed as GST Auditors for conducting a GST Audit:

  • Chartered accountants who do not hold certificate of practice.
  • Chartered accountants who are part time in practice.
  • Any relative or employee of the registered person (bound to have GST Audit).
  • Internal Auditors of the entity.
  • Chartered accountants who are indebted to the entity or the registered person for more than Rupees ten thousand.

Provisions for GST Audit:

There are certain provisions that are being laid down for conducting GST Audit in India. These are –

  • Section 2(13) of the CGST Act, 2017 defines the term ‘AUDIT’.
  • Section 35(5) of the CGST Act, 2017 deals with turnover limit prescribed for conducting GST Audit.
  • Section 65 in Chapter XIII of the CGST Act, 2017 deals with audit by tax authorities.
  • Section 66 in Chapter XIII of the CGST Act, 2017 deals with special audit.

How GST Audit are Conducted:

During a GST Audit process the authorized officer and the officials with the help of a GST Audit Checklist, check all the books and accounts of the registered taxpayer.  They verify all the documents, maintained book records, returns and statements provided by the taxpayer. They verify the applicable tax and the turnover shown by the registered person or taxpayer. After collecting all the information they have verified and audited, the GST Auditors analyze the information and interpret it and then record it in the audit notes. These are to be provided to the taxpayer for future references.

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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.