GST Audit and Annual Return

Under the GST Laws implemented in the year 2017 as per the new Goods and Services Tax (GST) Regime, there are these different types of GST Audit-

1. Audit under Section 35 of CGST ACT, 2017: This to be conducted by a Cost Accountant or Chartered Accountant in case the aggregate turnover of the registered person exceeds the limit provided in the said provision.
2. Departmental Audit or GST Audit by Tax Authorities:

·         Special an audit conducted as per the provisions of Section 66 of the CGST Act, 2017.

·         Audit to be done by Commissioner or any other officer authorized by the commissioner as per Section 65 of the CGST Act, 2017.

Provisions for GST Audit and Annual Return in CGST Act:

Under the GST Regime these following provisions have been prescribed for regulating the GST Audit Service and Annual Return-

1.       Section 44(1) of the CGST Act, 2017: It states that

“Every a registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year.”

2.       Section 35(5) of the CGST Act, 2017: It states that

“Every registered person whose turnover during a financial year exceeds the prescribed the limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.”

3.       Rule 80 (3) of the CGST Rules, 2017: It provides that

“Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”

What is turnover and aggregate turnover for GST Audit?

For the purpose of conducting GST Audit for a registered person Section 35(5) uses the term ‘turnover and Rule 80(3) uses the term ‘aggregate turnover’. In the CGST Act, 2017 the definition of aggregate turnover has been defined. Differentiation in both the terms can create a lot of chaos while conducting the GST Audit, but it is to be noted that a limit of turnover has been specified in the act to avoid any chaos or problem. It has been specified that any person or company having a GST Registration and a turnover exceeding Rs. 2 Crore in a financial year is liable to be audited under the act.

Related Articles: Who can do GST Audit- Some FAQs

Annual Returns:

Annual Returns are an additional reporting requirement for the company or the registered person. As per Section 44 of CGST Act, 2017 are to be filed by every registered the person on or before 31^st December of each year. It has been notified that all the normal taxpayers have to file in Form GSTR-9 and taxpayers under the composition scheme has to file the Form GSTR-9A.