Extract from ICAI President’s Message – April 2021

I, along with the Vice-President CA. (Dr.) Debashis Mitra had the privilege of meeting key Government functionaries to discuss matters related to contribution of accounting profession and its increasing role in economy. Our meeting with Smt. Nirmala Sitharaman, Hon’ble Union Finance and Corporate Affairs Minister was held to discuss our representation regarding the removal of requirement of audit and certification of reconciliation statement by a Chartered Accountant under CGST Act.

We, besides other points, apprised that GST Audit is not an avoidable compliance. GST Audit by a Chartered Accountant ensures maker checker concept thereby detecting inconsistencies, lapses, errors and ambiguities, if any, in complying with the provisions of GST law.

We also submitted that Audit should not be seen as a cost to the taxpayer, rather it is an investment for him, the benefits of which are reaped over a period of time. The taxpayer is able to take corrective actions for irregularities/lapses detected during the audit thereby saving avoidable costs in terms of interest and penalties. Further, audit also helps the taxpayers in saving on litigation expenses as errors are noticed and addressed in time.

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26 Comments

  1. Swetang Shah says:

    Respected All,

    Audit is an independent examination of tax payers records by qualified professional who understands the law and reporting/rectifying the non compliances. GST Audit helps tax payer to do the necessary compliances as per law and save them from hefty penalties and huge interest cost. GST Audit helps government to ensure the implementation of law in true spirit and increase the tax revenue. Auditor is a bridge between tax payer and government. GST law is in a nascent stage and assessments of GST has not started yet. If GST Audit will be removed, then it will create unnecessary litigation between tax payer and government and ultimately corruptions in assessment which everyone knows very well. Neither tax payer nor departmental officers have knowledge or clarity about the GST law. If government thinks it is right step to remove the GST Audit, then it will create disaster and result in failure of GST law. Time will tell what is right or what is wrong.

  2. Shine says:

    ICAI is very much greedy , they have not pointed out complicated GST and the struggle being faced by numerous consultants to FM to comply with the law while submitting the returns. GST returns are being furnished everywhere either by CAs, CA(inter), MBA… other professionals or with their support. So no need of GST audit again.

  3. Shine says:

    ICAI is very much greedy , they have not pointed out complicated GST and the struggle being faced by numerous consultants to FM to comply with the law while submitting the returns. GST returns are being furnished everywhere either by CAs, CA(inter), MBA… other professionals or with their support. So no need of GST again.

  4. Ravi kumar Murarka says:

    Dear sir, Icai has doing great job as an eye opener to the Govt. But whether Govt will listen it is to be seen. The results are very much there and at least 25 years required to establish the law like Gst. Hope for the best

  5. B S Roy says:

    To eliminate all compliances we need to make our country as zero tax country or an imaginary world where everyone pays due taxes on self assessment basis and where protection against revenue leakage is guaranteed

  6. Suresh A Pai says:

    GST audit by Chartered Accountants or any other professional body is a big scam and waste of common man’s money . Most of these Audits are cornered by big 4 CA firms or members of Central & Regional council office bearers of the Institute thus leaving little scope for small firms to come up . If Audit is to be mandatory , it shd be given to those having less than 5 years of practice and do not directly or indirectly connected to big 4 or Central or Regional Council Members of professional bodies . There is a scramble to become Council members for publicity and to corner Audit which is selfish . So except Company Audit , no audit should be given to professionals as there is no need . The scams of Nirav Modi and bank scam , ILFS scam was allowed despite the Audit as Auditors did not do their work honestly. The Institute failed to take any action on these scams. Today institutes ethical values are gone to the wind !

  7. Shyam Kumar Krishna says:

    My Recommendations on GST.

    1. GST should be charged @ source of origin on MRP rather than at consumption ( Eliminate multiple stage of tax collection).
    2. Improve compliance by changing the point of taxing with reduction in number of assesse to be monitored.
    3. Rather focusing on collections of penalties & interests work towards system that eliminates errors in the bud.
    4. Why waste tax collections on so many resources ( tax officials, Infra, bribes ) … Presently bribe taken by officials is higher than tax collected.
    5. For every new business started with taxable revenue should be onboarded by GST authorities & hand holded to ensure non occurrence of lapses.
    6. Taxpaying buisness members should be treated with respect rather than treating like hard-core criminals for lapses & mistakes.
    7. Compliance can only improve by awareness not by imposing penalties & interests .
    8. Create fearless , less beurocratic & relaxed environment.
    9. Lapses & mistakes should be an learning curve not an end of the road to tax payer.

    HOPE MY VOICE IS HEARD & UNDERSTOOD AT ALL LEVELS.

  8. Krishnan says:

    Government, Industries and Public lost faith after Reports of Massive Frauds and Misguidance by CAs to Industries on GST Rules. Most of the CAs are ignorant of the Rules and were advicing just as they were in PRE-GST era. The Present GST software has inbuilt checks, controls and Reports hence doesnt require another wasteful effort from a CA. If the Rules are strictly followed then Automatic Reconcilation will hapoen.

  9. Balasubramanyam K S says:

    GST audit, Tax Audit, Cost Audit, Transfer pricing audit, Form 15CA certification, Secretarial audit are waste of time and money. Most of the audits mentioned in this comment are not in any other western world. This lobbying by various association has 2 b stopped by Government. Financial audit qualitywill automatically improve

  10. D DHARMA RAO says:

    GST Audit was extra burden to Tax payers, since income tax returns are filled with proper audit duly certified by the C A, what more left on GST. Audit. So GST audit is not necessary at all.

    D DHARMA RAO

  11. Somasundaram says:

    GST audit is not necessary. Book of accounts and gst returns already have verified by the CA at the time of income tax audit. GSTR 9(annual return) can be corrected in accordance with the audited financial statements and tax dues can be settled if necessary. Moreover in this pandemic situations GST audit is additional work to accountants/ tax consultants and financial burden to the business men.

    1. Subramanya Hegde says:

      Personally, I don’t agree fully with your submissions. I am working GST Team in Bank and reaped the benifit of GST Audit. Frankly inform, how many of you reconciled monthly GSTR returns outward supplies with Financial Statement without any differences. Definitely, GST AUDIT brings establishment of system in organization and provide correction in GST Liability, if required. Take it in right spirit, you will definitely benefited. GST Audit may fail only 768402 of GST Portal Deficiency (viz, Return not meeting industry specific requirements, No provision for c/f of figure, too much data requirements in 9C.

  12. Dhakshina Moorthy says:

    If govt has proper software for GST and all so many officers of state sales tax and central officers really work where is the need for audit. Auditors are worried about their income. But only people who are benifitted by this govt is auditor s.

  13. Vivek pumar Pasricha says:

    If it’s not an avoidable compliance ,then where did our honourable representatives of ICAI miserably failed to put their points before the FM?

  14. RAGHU RAM B. says:

    of course sir, GST audit is tool of rectifying, increasing and abiding compliances in GST law and rules. But, if, gst audit is not avoidable option, then let its scope be broaden to Registered Tax Practitioners, who are qualified in gstp exam and also to other Tax professionals who are in practice since a long time.

    1. CA PUNIT GUPTA says:

      Totally agree with you SIR. Only those CA should be allowed to conduct the GST audit who are into practice of GST & handle litigations before courts. General practitioner CA will not be able to understand the nuances of GST law. It is a very specialized practice when one conducts GST audit.

  15. Rohit goel says:

    There is no need for audit from chartered accountants in gst as everything is already declared in so many various returns, and as gst and income tax are already linked to each other with PAN. Moreover audit in incometax is compulsory above 1 cr. Turnover and audit limit in gst as fixed earlier was 2 cr. That means the tax payer who would fall in audit category in gst would already have audited accounts by C.A. in accordance with income tax.

  16. CA ATUL JAIN says:

    Sir, Point validly made before Finance minister. This is a basic compliance mechanism, where benefits in terms of cost or revenue earned cannot be the benchmarks. If this is the case, then in future same criteria may be applied elsewhere.

  17. CMA ANIL SHARMA says:

    Very true. GST Audit is a system of Internal Checks and Controls which help the industry to minimize costs and maximize compliances. It save business entities from delay in compliances and timely action. Moreover, business entities are not got matured enough to comply GST laws being modified so often, GST Audit helps to reduce unnecessary litigation to the exctent

  18. Antony Mathew says:

    Honestly do you believe what he said? It’s just the fact that CAs just lost a major assignment. Tell me how many CAs where pulled up for GST fraud? Could anyone honestly say that CAs were in grip with the act? Ever heard of an audit under service tax by a CA? So govt after spending crores on a automated system for matching resorted to a less foolproof method verification. To be honest, ICAI and it’s education system is decades old….. For example take FR old syllabus May 2018 question 1. Read thru it and it clearly says multiple loans outstanding at year beginning, now look at the suggested answer given. It’s just lazy writing and for sake of convenience do something. When the answer is far from correct.

    1. Shine says:

      ICAI should be revamped completely. Their worry is about loss of fee only. Has any member of ICAI raised his voice during numerous amendments brought by
      GSTIN since 2017 ??.

      If you give one kg rice and mustard separately to a CA they will be unhappy. But mixed together and give to a CA who will be happy since he can work one week to separate the same. But actually what is the result. No valued added. but CAs will be happy since he is separating both with care, efficiency, technology, due diligence and so on…..

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