GST Audit in India: Process, Documents Required and Due Dates

Registered taxpayers in India with an aggregate turnover of more than 2 crores in a financial year must have their accounts book audited by an authorized Cost Accountant or a Chartered Accountant in accordance with Section 35 (5) of CGST Act. The taxpayer must submit a copy of the GST audit report, financial statements, and reconciliation statement using Form GSTR 9C. This report must be submitted once per financial year. Don’t worry if your are not familiar with GST audit. This blog will provider you with all the information on “What GST Audit and How to prepare for it?”

What is GST Audit?

GST audit is a process of examining the records, returns, and other documents maintained by a taxable person to verify the accuracy of the turnover declared, taxes paid, refund claimed, and ITC availed, as well as to assess compliance with GST provisions. It is mandatory for registered taxpayers whose annual aggregate turnover exceeds a certain limit to get their accounts audited by a practicing CA.

What is the purpose of GST Audit?

The main purpose of doing audit under GST is to verify accuracy of turnover, payment of taxes, claiming of refunds and availing of input tax credit under GST provisions laid down by the Central Government. GST Audit is important to make sure the correctness of the self-assessment done by the registered person.

What is the Process to Prepare GST Audit?

To prepare for a GST audit, the following steps should be taken:

• Inform the auditees about the applicability of the GST audit.
• Confirm the eligibility of the auditees to become a GST auditor according to ICAI guidelines.
• Confirm the appointment by issuing quotation and an engagement letter.
• Gather information about the auditee’s business. products, and services and advise them to maintain proper books, accounts, and records.
• Create a questionnaire with key areas & activities in mind to guide the audit process.
• Create an audit program that specifies the nature, timing, and scope of audit.
• Draft a list of records to be verified and notify the auditees to keep them ready for use during the audit process.
• Collect all the required reconciliations.

What are the Documents Required for GST Audit ?

The following documents are required during the preparation for the GST audit:

• Audited financial statement based upon PANCard.
• Annual Returns led by Goods and Service Tax Identification Number based on the Form GSTR 9.
• The GSTR 9 is used to collect Reconciliation Statement Certificate. This certificate will reconcile the value of the supplies, tax and the declared sum in Form GSTR 9 with the audited financials in PAR A and the audited reports in Part B.

Which entities are liable for GST audit?

Entities that are liable for GST audit are:

• Every GST registered taxable person whose turnover exceeds the prescribed limit during the financial year. The current turnover limit set by the GST rules is more than Rs. 20 crore.
• Taxpayers with a turnover exceeding Rs. 5 crore in the pervious financial year are required to file Form GSTR-9C on a self certification basis.

What is the Due Date and Penalty of Late Filing for GST Audit?

The limit and submission of due date of GST Audit is December 31st of the preceding financial year. Further, with the CBIC notice you can extent the due date for the registered taxpayers. Currently, there is no specific penalty is mentioned under GST Act for the late filing of GST audit report. But a general penalty of INR 25,oo is applicable for not filing the audit report.

Summary

It is important to comply with GST rules and audits of returns, records, and documents. It is essential to appoint an audit well in advance or at the beginning of the financial year. The audit report should be biased and not prepared by the registered GST payer to avoid heavy penalties.