Audit under GST is the process of examination of records, returns and other documents As per sub-section (13) of section 2 of CGST Act 2017, Audit means examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made there under or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made there under . maintained by a taxable person.
Various measures have been taken by the government to ensure compliance of GST law and audit is one them.
Every registered person is required to keep accounting books up to 72 months the due date of filing annual return for a particular year.
When GST Audit is required to be conducted?
Audit by CA/CMA mandatory if Turnover exceeds Rs. 2 Corers.
Section 35(5) of CGST Act 2017: Every registered person whose turnover during a financial year exceeds the prescribed limit (2 crore) shall get his accounts audited by a Chartered Accountant or a Cost Accountant and shall submit
- a copy of the audited annual accounts,
- the reconciliation statement under sub-section (2) of section 44 and
- such other documents in such form and manner as may be prescribed.
Reconciliation statement reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement and such other particulars as may be prescribed. As per Rule 80(3) of the CGST Rules, 2017, every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.
GSTR 9C should be filed by the taxpayers whose annual turnover exceeds Rs 2 crores during the financial year.
Normal Audit by the Commissioner (Tax Authority)
as per Section 65(1) of the CGST Act 2017 the Commissioner or any officer authorized by him can undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed,
the officer may conduct audit at the place of business of the registered person or in their office, and
shall be informed, by way of a notice not less than 15 working days prior to the conduct of audit in FORM GST ADT-01.
The audit under sub-section (1) shall be completed within a period of 3 months from the date of commencement of the audit , which may be extended by further period not exceeding 6 months,
On conclusion of audit, the registered person shall be informed by proper office, within thirty days in Form GST ADT-02[as per rule 101(5) of CGST Rules 2017], about the findings, his rights and obligations and the reasons for such findings.
Special Audit by Chartered Accountant.
At any stage of scrutiny, inquiry, investigation or any other proceedings, any officer not below the rank of Assistant Commissioner, is of the opinion that
- the value has not been correctly declared or
- the credit availed is not within the normal limits,
He may, with the prior approval of the Commissioner, direct such registered person to get his records including books of account examined and audited by a Chartered Accountant or a cost accountant as may be nominated by the Commissioner.
The officer will issue direction in Form GST ADT-03 to the registered person in this regard.
The Chartered Accountant or Cost Accountant so nominated shall submit a report of such audit duly signed and certified by him to the said Assistant Commissioner, within the period of 90 days, which can be further extended by ninety days.
Special audit can be conducted even if accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.
The expenses of the examination and audit of records, including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner. On conclusion of the special audit, the registered person shall be informed of the findings of the special audit in FORM GST ADT-04.
Where the special audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the proper officer may initiate action under section 73 or section 74.
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