Who can do GST Audit- Some FAQs?

GST Audit Service means when an audit is conducted for a taxpayer or company who are registered with the Goods and Services Tax, as per the provisions provided in the relevant statutes. A GST Audit is conducted by a GST Auditor appointed as prescribed by the GST laws. Here we are answering certain questions related to the appointment of auditors for performing the GST Audit Service for better understanding.

  1. Can a company appoint a company secretary as a GST Auditor? 

No a company secretary cannot be appointed as a GST Auditor. As per the provisions given in Section 35(5), Section 2(23) and Section 2(35) read with other related provisions, only cost accountants or chartered accountants can be appointed as GST Auditor for performing the GST Audit Service.

  1. Are statutory auditors eligible to be appointed as GST Auditors? 

Statutory auditors are allowed to be appointed as GST Auditors this is because GST Audit Service is an audit prescribed under the statute. Hence, they are not imposed with restrictions for not being appointed as GST Auditor under Section 144 of the Companies ACT, 2013.

  1. Are internal auditors eligible for being appointed as GST auditors? 

Since GST Audit Service is a service and activity conducted under the laid provisions of the statute, therefore an internal auditor of the company cannot be given the responsibility to conduct GST Audit as a GST Auditor in the same company. This has been clarified already in the 378th Meeting of the Institute of Chartered Accountant of India.

  1. Can GST Audit Service be performed by a member who has not yet obtained certificate of practice? 

As per Section 35(5) read with Section 44(2) of the Central Goods and Services Act, 2017 and Rule 80(3) of the CGST Rules, 2017, the accounts of a taxpayer or company having GST Registration have to be audited under certain specified conditions by a chartered accountant only. Also, as per Section 6 of the Chartered Accountants Act, 1949 a member enrolled in the ICAI is entitled to practice in India or elsewhere when they are holding a practicing certificate from the council.

This implies that only members holding a practice certificate are allowed to work as Chartered Accountant which means that only they can be appointed as GST Auditors and not the members who do not hold certificate practice.

  1. Are members in part time practice, be appointed to perform GST Audit?

As per the GST Laws, members in part time practice cannot be appointed as GST Auditors, even if they are holding a certificate of practice. This has been clarified already in the Resolution passed in the 242nd meeting of the council of ICAI. The resolution came into effect from 1st April, 2005.

  1. Can a registered person appoint two or more chartered accountants as joint auditors for conducting GST Audit Service? 

Yes, a registered person is allowed to appoint two or more chartered accountants as GST Auditor where they act as joint auditors to perform the GST Audit in India. In case the joint auditors are of different opinions or have disagreement, they are allowed to prepare separate audit reports.

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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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