What is GST Audit?
As according to the CGST Act, Section 35 (five), the registered taxpayers of India whose combination turnover is over ₹ 2 crores in a monetary 12 months (FY) to get their bills ee-e book audited via way of means of an authorized Cost Accountant or a Chartered Accountant. The taxpayer registered under GST have to put up a duplicate of the GST audit file, monetary statements, and reconciliation declaration via Form GSTR 9C. The involved taxpayer have to put up the reviews to the tax branch as soon as in a monetary 12 months. Here know more about Gst registration in punjab
Obligation Of Audit Under GST
The GST audit is ready verifying returns, facts, and different associated files maintained via way of means of someone registered under GST. The want for GST Audit is to make sure the correctness of the facts and take a look at whether or not they trust the GST Act, 2017 via way of means of an authorized character of the Tax authority.
Under the GST scheme released via way of means of the Government of India in 2017. It is a taxation regime in which the taxpayer can investigate their tax liability, record an Income Tax Return (ITR), and pay the tax. Therefore, to test that the taxpayer has assessed it correctly, an audit beneathneath GST is required. Among the numerous methods to make sure GST practice, an audit is one of the methods to test its correctness.
Types of GST Audit in India
There are 3 unique forms of audits under GST. These audits and their specs are cited below:-
GST Audit Based on Turnover: This form of audit is executed via way of means of the Cost Accountant or the Chartered Accountant appointed/employed via way of means of the taxpayer. According to the CGST Act, this audit is performed while the turnover exceeds the restriction of ₹ 2 crores, and the taxpayer wishes to get audits for his or her facts and bills.
Normal/General GST Audit: This GST audit is performed via way of means of the CGST/SGST Commissioner or some other officer authorized via way of means of them. It is performed on Commissioner’s order with 15 days earlier word to the taxpayer.
Special GST Audit: This audit is performed via way of means of a Cost Accountant or a Chartered Accountant authorized via way of means of the Commissioner. It is performed at the order of the Assistant or Deputy Commissioner with the earlier approval of the Commissioner.
Objectives of GST Audit Under Law
As according to the Audit definition below segment 2(13) of the Central Goods and Services Tax (CGST) Act, the GST audit has the subsequent objectives:-
An audit is scrutiny of returns, facts, and different comparable files.
The returns, facts, and different files need to be issued or maintained under GST or greater legal guidelines.
The scrutiny takes location for the verification of
Paid Amount of Taxes
Availed Input Tax Credit
The inspection additionally takes location to evaluate the auditee’s compliance with the legal guidelines of the GST Act and its guidelines.
The goal of the audit below GST is to make sure that the declared turnover, claimed refunds, enter tax credit, and paid taxes are correct. The verification is carried out in compliance with the GST Act. Additionally, GST Audit guarantees that the intents follow GST Rules.
Turnover-Based GST Audit Under Section 35(five)
According to Section 35 (five) of the Central Goods and Services Tax (CGST) Act, any taxpayer with an combination turnover of ₹ 2 crores or greater than ₹ 2 crores in any monetary 12 months (FY) have to get their account books audited on an annual foundation. The GST Audit need to be carried out via way of means of a value accountant or a chartered accountant. Financial Year refers back to the annual 12 months beginning from 1st April and finishing on thirty first March of the succeeding 12 months.
The method to calculate the combination turnover of an corporation is as follows:-
Aggregate Turnover = Value of the taxable substances (intrastate and interstate) + Goods and Services export substances + Exempt substances
The Aggregate Turnover Sectors For GST Audits are:-
Transfer of Stocks
GST Audit via way of means of Tax Authorities
The tax-payer’s audit have to be finished via way of means of an SGST/CGST commissioner or authorized employees via way of means of the commissioner.
A GST audit word need to be despatched out to the taxpayer 15 days earlier than accomplishing the procedure.
The audit could be concluded 3 months from the preliminary date the tax government began out it.
The Commissioner of SGST/CGST can boom the audit beneathneath the GST duration for up to six months via way of means of filing a legitimate purpose in writing layout to the authority.
GST Audit Limit via way of means of CA or CMA
According to the price range provided on 1st February 2021, the GST Audits via way of means of CA and CMA were removed. This discontinuation may be a alleviation to the auditees most effective if the alternative audits via way of means of unique audits and departments are correct.
Document Requirements for the Taxpayers
There are some files that the taxpayer has to supply in the front of the auditee for the GST audit. These files are as follows:-
PAN-primarily based totally Financial Audited Statements.
GSTIN-primarily based totally Form GSTR-nine led Annual Return.
Reconciliation Statement Certificate via Form GSTR 9C. The certificates need to reconcile the substances’ cost and the tax and the declared sum in Form GSTR nine in comparison to the monetary audited in Part A and the audited reviews in Part B.
Forms for Annual Return and GST Audit
Forms which can be required for submitting the once a year returns and GST Audit are as follows:-
Type of Taxpayer Form to be Filed
Whether it’s far or now no longer relevant to Audit beneathneath GST
A Regular taxpayer of India who’s submitting GSTR 1 in addition to GSTR 3B Form GSTR-nine
A Taxpayer who comes beneathneath the Composition Scheme Form GSTR-9A
Operator of E-commerce Form GSTR-9B(It is but to return back into practice)
Applicable Forms for GST Audit
Taxpayers whose turnover yearly exceeds Rs. 2 crores in a Financial Year Form GSTR-9C
Due Date for Submission GST Report
The remaining date for the GST Audit restriction and submission is thirty first December of the previous monetary 12 months. Through the CBIC word, the due date may be prolonged for the registered taxpayers.
Penalty for now no longer Submitting Audit Report
As of now, there’s no particular provision for the GST Audit file. However, as a penalty, an quantity of ₹ 25,000 wishes to be paid to the authority. However, the penalty does now no longer follow to the taxpayers whose annual turnover is much less than the restriction of ₹ five crores and whose GST go back submitting has been waived off withinside the Form GSTR 9C in FY 2018-19.
Compliance of returns, facts, and files with guidelines and audits below GST holds plenty of importance. It is essential to agenda an appointment for the audit and plan it earlier or at the start of a monetary 12 months. Also, it’s far important that the GST audit reviews are independent and feature now no longer been concluded via way of means of a registered GST payer.