GST Audit Process and Assessment Thereof

The current article provides the audit and assessment procedure involved in an audit being conducted by the GST authorities and also GST audit process and assessment involved in the special audit being conducted by the proper officer.

Audit Process And Assessment In Case Audit Is Being Conducted By The Tax Authorities –

Audit Process –

Section 65 of the Central Goods and Service Tax Act, 2017 contains provisions relating to the Goods and Service Tax audit being conducted by the tax authorities. Audit process in case of an audit conducted by the tax authorities is being listed below –

• Audit of any registered person may be undertaken by either the Commissioner or any officer authorized by the Commissioner;
• Such audit may be conducted either at the place of office of the officer or at the place of business of the registered person;
• Information regarding the conduct of audit needs to be provided to the registered person, by way of notice, not less than 15 working days prior to the commencement of the audit;
• Audit so initiated needs to be completed within a period of 3 months from the date of its commencement;
• It is an obligation on the part of the registered person to provide the following information / documents to the officer during the course of an audit –
  • To provide facility to verify the books of accounts and other documents as and when required;
  • To provide such information as required and to render assistance for the timely completion of the audit.

Assessment Procedure –

• After completion of the above audit process, the proper officer is required to inform the registered person about the findings, his rights and obligations and appropriate reason for the findings. The proper officer is required to inform the registered person within a period of 30 days from the date of completion of an audit;
• In case, the proper officer, has not communicated any such findings, then, it can be concluded that the audit is completed without any findings;
• If the findings of the proper officer results in detention of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized, the proper officer may issue a demand notice under section 73 or section 74 of the Central Goods and Service Tax Act, 2017.

Audit Process And Assessment in Case of Special Audit

Audit Process –

Section 66 of the Central Goods and Service Tax Act, 2017 contains provisions relating to the special audit. Audit process in case of the special audit is being listed below –

• If the officer, not below the rank of the Assistant Commissioner, at the time of scrutiny, inquiry, investigation etc., is of the view that the correct value of the transaction is not declared or the input tax credit availed is not within the normal limit. In such case, the officer may direct the registered person to get his books of accounts audited;
• The officer needs prior approval of the commissioner before giving direction of special audit to the registered person;
• The books of accounts of such registered person would be audited by a Chartered Accountant or a Cost Accountant as appointed by the Commissioner;
• The appointed auditor is required to conduct an audit and submit the audited report to the Assistant Commissioner within a period of 90 days;
• It must be noted that all the expenses of examination, an audit of reports and the remuneration of the auditor would be fixed and borne by the Commissioner.

Assessment Procedure –

• In case of any findings, before finalizing the same, it is mandatory to give an opportunity of being heard to the registered person;
• If the findings of the proper officer results in detention of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized, the proper officer may issue a demand notice under section 73 or section 74 of the Central Goods and Service Tax Act, 2017.