Audit Required Even If Your GST Turnover Is Less Than 2CR

Let’s see how? GST is applicable from the July 17 so for FY 17-18 we have only 9 months of GST period that is July 17 to March 18.

Aggregate Turnover:-

Rule 80(3) says that ‘Every registered person whose aggregate turnover during a financial year exceeds 2 crore‘ GST audit required. It means we have to consider turnover of first quarter (April-June) of FY 17-18 for the aggregate turnover.

So effectively even if your GST turnover is less than 2 crore but it exceeds the prescribed limit of 2 crore after adding the value of first quarter of pre GST period, audit under GST is required.

How aggregate turnover defined:-

Aggregate turnover includes taxable, exempt as well as nil rate of supply. So even alcoholic liquor for human consumption is exempt from GST however it still become part of aggregate turnover and would be including for the calculation of threshold of 2 crore. Stock transfer done on cross charging basis would also be considered for the aggregate turnover.

Even if someone has taken registration by virtue of reverse charge mechanism of section 9(3) of CGST act and are primarily in business or dealing in exempt goods or services still need to be audited under gst if turnover exceed the threshold limit of 2 crore. For example generally schools are not required to be registered under gst until unless they take services liable to be paid under reverse charge or providing taxable services like sale of relevant materials. Once a dealer is registered his aggregate turnover would be considered for the limit of audit.

It is interesting to note that turnover would be considered on PAN basis however audit under gst is required on registration basis as well as state wise. It means if someone is having multiple registration on single PAN they need to have multiple gst audit once PAN wise turnover exceed the limit of 2 crore.

GST AUDIT REQUIRED EVEN IF YOUR GST TURNOVER IS LESS THAN 2CR

AS GST is applicable from the July 17 so for fy 17-18 we have only 9 months of GST period. Rule 80(3) says that “Every registered person whose aggregate turnover during a financial year exceeds 2 crore” GST audit required. It means we have to consider turnover of first quarter (April-June) of fy 17-18 for the aggregate turnover.

So effectively even if your GST turnover is less than 2 crore but it exceed the prescribed limit of 2 crore after adding the value of first quarter of pre GST period, audit under GST is required.

(Writer is a Member of ICAI and in full time practice at Varanasi and can be contacted at camishramanish@gmail.com Mobile-9560341460).