GST Audit

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GST Audit

Audit under GST is the process of examination of records, returns and other documents maintained by a taxable person. The purpose is to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess the compliance with the provisions of GST.

Threshold Limit for Audit under GST by CA/CMA

As per section 35(5) of CGST Act 2017, every registered taxable person whose turnover during a financial year exceeds the prescribed limit is subject to audit. As per the current notified GST Rules, the turnover limit is above Rs 2 crore. Such businesses must get their books of accounts audited by a Chartered Accountant or a Cost Accountant. Such taxpayer shall electronically file:

An annual return using the Form GSTR 9 by 31st December of the next Financial Year.
The audited copy of the annual accounts.
A certified reconciliation statement in the form GSTR-9C, reconciling the value of supplies declared in the return with the audited annual financial statement.
Any other documents in such form and manner as may be prescribed.

Objectives and Principles of GST Audit:

To measure the level of compliance of taxpayer in the light of various provisions of GST Act and rules thereof.
To examine the accuracy of declarations made by assessee.
To examine if results produced by accounting system are correct wrt to the liability and ITC.
To assess under reporting of outward liability due to error, omission or deliberate deception.
To get the right tax at the right time.