Article explains Applicability of Audit under GST, Requirement of GST Audit, Furnishing of Documents under GST Audit, Types of GST Audit, Calculation of Turnover for F.Y. 17-18, Calculation of Aggregate Turnover under GST , Tenure of Retention of Accounts under GST , Auditor Qualification for GST Audit, Audit in case of multiple Branches, Accounts to be reviewed under GST Audit, Forms to be filled under GST Return and Due Date of GST Audit and Penalty for Late filing of GSTR 9.
Every registered person must get its accounts audited if the aggregate turnover during FY exceeds Rs. 2 Cr from sale of goods or services. Calculation of turnover shall be PAN based i.e. all sale of goods/ services shall be taken for computing the limit of Rs. 2 Cr.
GST audit limit is same for all registered taxpayers, i.e. no separate limit is specified for special category states or UTIs
Exception- Provision for GST audit will not be applicable in case Central Government/ State Government/ Legislative Assembly in case they are subject to audit by CAG or any Statutory Auditor appointed for auditing the accounts of Legislative Assembly.
GST Audit is required for the following reasons-
1. GST is the self-assessment tax regime so GST audit is required for ensuring that tax payer has correctly assessed hi liability.
2. It involves examination and evaluation of records, GST returns and other related documents.
3. To obtain reasonable assurance and ensure that financial statements are free from any material misstatements.
1. Annual Return
2. Copy of Audited Annual Accounts
3. Copy of reconciliation Statement
Under section 35 (5) of GST law, three types of GST audit is being specified-
|Sr. No.||Name of Audit||Prescribed Authority||Condition|
|1.||Based on Turnover||Chartered Accountant/Cost Accountant||Turnover Exceeds Rs 2 Cr.|
|2.||General Audit||GST Commissioner or any other officer authorized by him||On order passed by Commissioner, giving prior notice of 15 days.|
|3.||Special Audit||Chartered Accountant/Cost Accountant nominated by Commissioner||On order passed by Deputy/Assistant Commissioner with prior permission of Commissioner.|
Government through its press release dated 3rd July, 2019, clarified that for computing the turnover for F.Y. 2017-18, period should be taken from 1st July 2017 to 31st March 2018, i.e. the First Quarter shall be excluded.
For computing the aggregate turnover, following sale shall be included-
1. Value of all inter-state taxable supply
2. Value of all intra- sate taxable supply
3. Value of all exempt supplies
4. Value of all export supplies
5. Job work supplies on principal to principal basis
6. Zero rated supplies
7. Any supply to agent/ job work on behalf of principal
For computing the aggregate turnover, following sale shall be excluded-
1. Taxable supply on which reverse charge is applicable
2. All taxes and cess paid under GST
3. Goods supplied and received back from job work
Every registered person must retain books of accounts for the period of 72 months from the due date of furnishing annual returns.
Provision in case of Failure to maintain the accounts
As per Section 35 of GST Audit, audit can be performed by a Chartered Accountant or a Cost Accountant. But there are exceptions in the provisions-
1. An Internal Auditor cannot be also appointed as a GST Auditor
2. GST practitioner is also not allowed to perform GST Audit
– While computing the limit of Rs. 2 Cr., turnover of all the branches of an organization is be considered and if the cumulative turnover exceeds the limit of Rs. 2 Cr then every branch will be liable for GST audit irrespective of the fact that their individual turnover does not exceed the specified limit.
– Organization can appoint either the single auditor for all branches or separate auditor for each branch.
1. Purchase Register
2. Sale Register
3. Stock Register
4. GST Expenses
5. Statement congaing Input Tax Credit availed and utilized
6. Output Tax Challan
7. Statement of E-way Bill generated during the period
8. Any changes made under GST during the period
|GSTR 9||For Filling Annual Return|
|GSTR 9C||For Certified Reconciliation Statement|
As per the GST Act, due date of audit and annual return is specified as 31st December of subsequent fiscal year and in case of failure in complying with the same then as per act no specific penalty is prescribed. So it will be covered under the head of general penalty of Rs. 25000.