In broader sense Audit means an examination of all the financial records of a company or business entity by an independent person to produce a report or express opinion.
As per section 2(13) of Central Goods and Services Tax Act, 2017, “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 thereunder;
The Scope of GST Audit includes gathering of financial information of registered person, income tax returns, visit of registered place.
The Audit process under the Goods and Services is to verify if the GST has been accounted properly in registered person’s transactions, ensure that registered person has reported correct information in GST returns and verification of documents maintained or furnished the registered person.
In general auditor is independent and he does audit without any premeditated mindset.
Here in case of Audit under section 65 and 66 of this act is different, we can’t say auditor is independent since he has been assigned work of audit/investigation of Registered person on the basis of certain information or documents with the authority. The special audit under section 66 of this act is purely in the nature of investigation as this trigger when registered person found to be irregular in filing returns or evaded tax or wrongful utilization of input tax credit. We must remember that Audit under section 65 and 66 of this act is different from normal audit.
Departmental Audit or Scrutiny under erstwhile Indirect Tax laws
Audit or Scrutiny is not a new concept under GST Law. Under Central Excise Act 1944 there was special audit and conducted by cost accountant or chartered accountant nominated by the Chief Commissioner of Central Excise. Same provisions were also present in-service tax.
Audit Under Goods and Services Tax 2017
Section 2(13) of the Act defines Audit as “the examination of records, returns and other documents maintained or furnished by the registered person under this Act or Rules made thereunder or under any other law for the time being in force to verify, inter alia, 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 rules made thereunder”.
This section defines the audit in broader sense under the Act. First and foremost, step in audit is to detailed examination of records, returns and other documents maintained or furnished by the registered person under this Act or Rules made thereunder or under any other law for the time being in force. GST audit is not restricted to the verification of the documents or information furnished under this GST act and it extends to the documents or information furnished under other laws.
Main objective of Audit under this act is to ascertain the correctness of ;
- turnover declared
- taxes paid
- refund claimed
- input tax credit availed
- compliances with GST provisions
Chapter XIII of this act and Chapter XI of Central Goods and Services Tax (CGST) Rules, 2017 Part – A (Rules) covers the Audit and Assessment procedures.
This act categories the Audit in two types one is “Audit by Tax Authority” and other one is “Special Audit”
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