GST Audit refers to the examination of the returns, records and other important documents which a taxable individual maintains. Besides, confirming the adherence to the provisions of GST, other motives behind GST audit is to verify the fairness and accuracy of the turnover notified, input tax credit availed and refunds claimed.
Types of GST Audit
|Types||Conducted By||Circumstance that mandates it|
|Turnover based Audit||Cost Accountant or Chartered Accountant appointed by the taxpayer||When the Turnover exceeds 2 crores the taxpayer needs to get his records & accounts audited|
|Normal audit/General Audit||CGST/SGST Commissioner or any official empowered by him||On commissioner’s order after the issuance of 15 days prior notice|
|Special audit||A Cost Accountant or Chartered Accountant, authorised by Commissioner||On Deputy/Assistant Commissioner’s order after commissioner’s approval.|
Note: As per the notification dated 23 March 2020 every businesses having an annual turnover of below 5 crores, filing of GSTR-9C for FY 2018-19 is not mandatory.
Threshold for GST Audit
If the turnover of the registered taxable individual during an FY surpasses 2 Crore, he must get his accounts audited by a Cost Accountant or Chartered Accountant. He shall e-file the below-mentioned alongside the respective attachments: -
General Audit is conducted u/s 65 of the CGST Act by the officers authorised by the GST Commissioner on the issuance of general order to conduct an audit of the registered taxable individual. This Audit is performed at the business place of the registered taxable person after a prior intimation that is sent to the auditee in Form GST ADT-01 at least 15 days before the audit.
The General Audit must be completed within a period of 3 months from the initiation of the audit. However, in a few exceptional cases, the tenure to complete the general audit can be extended by 6 months by the GST Commissioner. On the successful completion of the Audit, a report is submitted by the auditor to RD alongside the summary of findings discovered during the audit process in Form GST ADT-02 within a period of 30days.
During the process, the registered taxable individual must provide complete cooperation and details including the records, returns, facility verify books, statements, deductions, inventory, amount of the input tax credit availed, GST Rate that is applied, etc.
The Special Audit is conducted by the Assistant Commissioner when he finds any incorrect value or declaration or amount of credit availed at any phase while conducting scrutiny or investigation. Based on the case’s nature & difficulty, the special audit can be conducted even when the books of the auditor have already been audited. A special audit may be initiated in writing by the Assistant Commission or prior confirmation from the Commissioner. To carry out the audit, the commissioner appoints Chartered Accountant or Cost Accountant The report about the special audit must be submitted by the auditor within a period of 90 days from the commencement of auditing. However, the period may be further extended for 90 days by the authorised official on request made by the taxable individual or the auditor. The expenses incurred on audit including the remuneration of the auditor are calculated and paid by the Commissioner.
On the completion of a special audit, an opportunity to present the justifications is given to the table individual on the finding of the audit. And in case any unpaid or short paid tax or wrong amount of credit availed is discovered, recovery actions are initiated.
Due Date to Submit GST Audit Report
31st Dec of the subsequent FY is the due date for the submission of GSTR-9 and GSTR-9C.
Note: Due date for filing GSTR9C for Financial Year 2018-19 is extended up to 30th September
The filing of GSTR-9 and GSTR-9C for businesses having turnover up to 2 crores was made optional for the Financial Years - 2017-18 and 2018-19.
Penalty on Non-submission of GST Audit report
A general penalty of INR 25,000 is applicable on non-submission of GST Audit report. However, no specific penalty in this regard has been laid by law.
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Content: The CBIC Provisional credit (i.e.10%) reduced to 5% under Rule 36(4) w.e.f. 1 January 2021
Interest not payable if GST return filed belatedly but amount deposited in Cash Ledger within due
Table of Content Issuance of order in Form GST REG-19 when the taxable person himself applies