To ensure that there are no major/ material misstatements, it is imperative that an auditor checks compliance with GST laws and rules even during the finalisation and audit of the Financial Statement under other statutes. It will not be out of place to state that the auditor should broadly review the reconciliation items for differences between books of accounts and GST returns before issuing his audit report to ensure that there are no major surprises during GST audit.
An illustrative list of reconciliations is set out below:
─ Balance of Electronic Credit ledger with ITC in books
─ Balance of Electronic Cash ledger with excess cash paid in books
─ GST paid in cash in March return, with payables as per books
─ Refund claimed in GST portal with GST ITC refund receivable in books
─ Refund rejected in GST portal with Rates and taxes in books
─ Turnover and output liability in GST returns and books
─ ITC claimed in GST returns and books
─ ITC reversed in GST returns and books
─ Ineligible ITC in GST returns and books
─ SCN/ ASMT 10/ Demand order with contingent liability/ liabilities
─ Adjustments of previous year, done in subsequent GST returns
─ Observations of internal auditors relating to GST matters
─ Ratio analysis across branches like GP/ NP rates (on quarterly basis)
─ RCM, TDS and TCS compliances
─ Reconciliation of GTO in books v. in FORM GSTR-1
─ Reconciliation of GTO in books v. in e-Way Bills
─ Reconciliation of GTO in Form GSTR-3B v. in FORM GSTR-1
─ ITC Reconciliation in FORM GSTR-2A v. FORM GSTR-3B
─ ITC Reconciliation in FORM GSTR-2A v. in Books
─ Reconciliation of accounts of the suppliers and vendors
─ Issuance of proper CN/ DN and their treatment in the Books and Returns
─ Whether cross-charge of certain incomes and expenditures are made.
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