Presentation on GST Audit and Annual Return. Covering handy material on Relevant provisions governing GST Audit , Indicative Checklist for GST Audit, Key Focus Areas for GST Audit, Important Facts on GST Annual Return, Annual Return (FORM GSTR-9) and Reconciliation Statement (Form GSTR-9C).
Page Contents
About GST Audit
What is Audit under GST Law ?
Annual Audits: Mandatory for registered person whose aggregate turnover during a financial year exceeds 2 Crore
Audit by Tax Authorities: Commissioner or any officer authorised by him may undertake audit of registered person (Section 65 & Rule 101)
Special Audit: if proper officer is of opinion that value has not been correctly declared or credit availed is not within the normal limits, he may such direct registered person to get his records examined and audited by a chartered accountant or cost accountant nominated by him (Section 66 & Rule 102)
Concept of Annual audits has been discussed in this publication.
GST Audit – Why & When,Who
| Why GST Audit ? |
|
| Who Can conduct GST audit ? | Practicing Chartered accountant or practicing Cost Accountant |
| What is the Due Date? (GST Audit & Annual Return) | For Financial year 2017-18 Extended due date is 30th June 2018. |
| What if Not filed on Due Date ? | Late Fees of INR 200/- per day during which failure continues subject to maximum of 0.5% of the turnover in State. |
Relevant Provisions on GST Audit
Section 2(13): Definition of Audit
- Audit means the examination of
- records, returns and other documents
- maintained or furnished
- by the registered person
- under this Act or the rules made thereunder
- 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
| Section 35(5) | Audit applicability |
| Section 44(1)&(22) | Annual Return |
| Rule (80)(3) | Form and Manner of Filing |
| Section 2(6) | Definition of aggregate turnover |
Gist of the Provisions mentioned above Every registered person Other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person has to file annual return.
Where aggregate turnover during a financial year exceeds 2 crore
√ Registered person has to get his account audited and
√ furnish copy of audited annual accounts and
√ Reconciliation Statement Duly Certified (Form GSTR-9C) along with the annual Return.
Reconciliation statement reconciles the value of supplies declared in returns furnished for the financial with audited annual financial statement
Aggregate turnover means the aggregate value of
√ I all taxable supplies
√ I exempt supplies,
√ I exports of goods or services or both and
√ I inter-State supplies of persons having the same Permanent Account Number,
√ I to be computed on all India basis
excluding
> the value of inward supplies on which tax is payable by a person on reverse charge basis and
> central tax, State tax, Union territory tax, integrated tax and cess
Indicative Checklist for GST Audit
√ Liability declared in GSTR-1 vs Paid in GSTR-3B √ Input Tax Credit Availed in GSTR3B vs available in GSTR-2A √ Liability and Input Tax Credit (ITC) as per return vs as per books
|
√ payment not made in 180 days √ Common expenses & exempt outward supplies
|
Key Focus Areas for GST Audit
√ Input Tax Credit
√ Reverse Charge Liability
√ Valuation
√ Classification
√ Frequent Changes
√ Reconciliation
√ Maintenance of account and records
√ Cross Charge for common cost sharing (in case of multi- state operations)
√ Transitional Credit
Important Facts on GST Annual Return
√ Annual return once filed can not be revised
√Annual return in form GSTR-9 is required to be filed by every taxpayer registered as normal taxpayer during the relevant financial year
√ Annual return (GSTR-9) can filed only if all GSTR-1 & GSTR-3B for financial year 2017-18 has been filed
√ Additional liability for the FY 2017-18 not declared in Form GSTR-1 and Form GSTR-3B may be declared in this return. However, taxpayers cannot claim input tax credit unclaimed during FY 2017- 18 through this return
Important Facts on GST Audit
√ Audit Report once filed can not be revised
√ Reconciliation statement (GSTR-9) can filed only if all GSTR-1 & GSTR-3B for financial year 2017-18 has been filed
√ Similarly it is mandatory to file all GSTR-1 , GSTR-3B & GSTR-9 before GSTR-9C is filed
√ Additional tax liability can be paid through FORM DRC-03 and that too using cash ledger only
Annual Return (FORM GSTR-9)
| Part- I Basic Details | Basic Details | ||
| Part- II Outward and Inward Supplies
|
(details as declared in returns filed during FY) | A. Transactions on which tax is payable
|
B. Outward Supplies on which tax not payable |
| Part- III Input Tax Credit (ITC)
|
C. Total ITC Availed Through Form GSTR-3B (Auto Populated)
D. Breakup of ITC Input | Capital goods | Input Services E. Difference (C) – (D) Ideally this amount should be ZERO F. Other Credits Transition Credit through TRAN -I & TRAN II Any Other ITC Availed but not specified above G. ITC Reversed as per Rule 37 / 39 / 42 /43 & Section 17(5) Reversal of TRAN-1 & TRAN-II Credit & Other reversal |
||
| Reconciliati on between | ITC as per GSTR-2A
ITC on received during FY 2017-18 but availed during April to September 2018 ITC available but not availed ITC available but Ineligible |
||
| GSTR-2A & ITC Availed | IGST Paid (-) IGST Credit availed on import of goods Total ITC to be lapsed in current FY | ||
| Part- IV Tax paid (as declared in returns filed during FY) | Separate Disclosure required for tax payable & paid through Cash & ITC respectively (For each head of tax (IGST|CGST|SGST|Cess), Interest, Late Fess , Penalty & Other payments) | ||
| Part- V Transactions for previous FY declared in returns for April to September of current FY | Supplies/tax reduced through Amendments (-) /(+) (net of credit notes) (net of debit notes) ITC availed for previous FY Reversal of ITC availed during previous FY | ||
| Part- VI -Other Information | Particulars of Demand & Refunds HSN Wise summary of Outward & Inward Supplies Inward supply from composition taxpayers Deemed Supply & Goods Sent on approval Basis but not returned Late Fees Payable & Paid | ||
Reconciliation Statement (Form GSTR-9C)
| Part-A Reconciliation Statement | ||||
| Pt. I. Basic Details
|
Pt. II. Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9)
Reconcialiation of gross turnover Reconcialiation of taxable turnover
|
Pt. III. Reconcialiation of tax paid
Reconciliation of rate wise liability and amount payable thereon Additional amount payable but not paid
|
Pt. IV. Reconcialiation of ITC
Reconcialiation of Net ITC Reconciliation of ITC declared in Annual Return (GSTR9) with ITC availed on expenses as per audited Annual Financial Statement / books of account
|
Pt. V Auditor’s recommendation on additional Liability due to non-reconciliation
|
| Part-
B
|
Certification: In case where GSTR-9C is drawn up by
I. a person who conducted the audit of accounts II. A person other than the person who conducted the audit of accounts |
|||
(Authors can be reach at cayogeshsetia@gmail.com, 91 84470 52001)
Author Bio
Very useful checklist !
INPUTS TAX CREDIT AVAILABLE IN GSTR-2A –2017-18 ( 28-03 -2018 ) BUT SAME PURCHASE WAS TAKEN IN FIRST WEEK OF APRIL 2018 IN GSTR -3B –IN GSTR-9 OF 2017-18–WHERE TO DISCLOSE -TABLE NO