GST Audit By Tax Authorities [Section 65]

Now proposal of scrap of GST Audit has taken in union budget 2021 

1. Scope of GST Audit under section 65 has been increased

2. As per Departmental information massive cases will be taken in GST Audit as per section 65

So all the professionals and consultant are preparing and update yourself to accept challenge faced in GST Audit under section 65

What are the challenge in Departmental GST Audit?  

1. To carry out return scrutiny as per books of accounts and return file during the financial year, both return as per section 37 and as per section 39.

2. Check all the document prepare as comply GST Rules i.e

• • All the tax invoice/payment voucher prepares as per section-31
  • Debit and credit note prepare as per section-34
  • All accounts to be maintained as list provided in Section-35

 3. Check all the other documents are matched with Audited books of accounts.

Audit by Tax Authorities

Special Audit

Audit

• Commissioner or any officer authorized by him may undertake audit of any registered person.
• Audit may be conducted at the place of business or in their office.
• At least 15 days prior notice should be given
•  Time Period: 3 months from the date of conduct of audit.
• Extension: not exceeding six months.
• On conclusion, registered person shall be informed about findings, rights & obligations.
• If results in demand of tax, shall be recovered under section 73 or 74.
• At any stage of scrutiny, inquiry or investigation.
• Assistant Commissioner is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits
• may nominate a Chartered Accountant or Cost Accountant
• Time period : 90 days
• Extension : further 90 days
• Audit will be conducted even if accounts have already been audited.
• If results in demand of tax, shall be recovered under section 73 or 74.

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. [Section 2(13)]

AUDIT BY TAX AUTHORITIES [SECTION 65]

Power to conduct the audit:-

• The Commissioner; or
• Any officer authorised by him, by way of a general or a specific order

Where to conduct the audit:-

• undertake audit of any registered person at the place of business of the registered person or
• in their office

Time period prior to conduct the audit:-

• Where it is decided to undertake the audit of a registered person, the proper officer shall issue a notice not less than 15 working days prior to the conduct of 

Time limit for completion of audit:-

• The audit is required to be completed within 3 months from the date of commencement of audit. The period is extendable for a further period of a maximum of 6 months by the Commissioner.

How to conduct audit:-

• Verify the documents on the basis of which the books of account are maintained and the returns and statements furnished under the Act and the rules made thereunder.
• The correctness of the
• The correctness of exemptions and deductions
• The correctness of the rate of tax applied in respect of supply of goods or services or both.
• The correctness of the input tax credit availed and utilized.
• The correctness of refund claimed.

During the course of audit, the authorised officer may require the registered person:-

1. to facilitate  the   verification of   accounts/records available or requisitioned by the authorities,

2. to provide such information as the authorities may require for the conduct of the audit, and

3. to render assistance for timely completion of the

Conclusion of Audit:-

1. The proper officer shall finalize the findings of the audit after due consideration of the reply furnished by registered person to audit observation brought to his notice during the course of

2. On conclusion of audit, the proper officer shall within 30 days inform the registered person whose records are audited, about the findings, his rights and obligations and the reasons for such findings.

3. Where the audit results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the proper officer may initiate action under section 73 or section