GST Audit by Tax Officers

GST Audit is a process of evaluation and examination of the taxable person’s filed and maintained records, documents and returns. The purpose of conducting GST Audit for a taxpayer registered under Goods and Services Tax (GST) is to verify the correctness and fairness of the declared turnover, claimed refunds, paid taxes and availed Input Tax Credits by the taxpayer. Also, it helps to check the compliance of assesses with the prescribed provisions of the GST. The GST department or Council conducts the audit as per the GST Audit Checklist prescribed by the CGST Laws.

Prescribed Threshold Limit for GST Audit:

All the GST registered taxpayers are liable to get audited under GST if the turnover for a financial year exceeds the prescribed threshold limit of Rs. 2 Crore. They become liable to get their accounts and financial statements audited by a Cost Accountant or Chartered Accountant. It is the duty of the taxpayer to file the following through electronic mode-

·         Copy of the audited annual accounts

·         Annual Returns through Form GSTR-9 on or before 31^st December of the next fiscal year.

·         Reconciliation statement, reconciling the audited annual financial statements and the value of the declared supplies in Form GSTR-9C certified by a CA

·         Any other particulars or forms or documents as may prescribed in CGST Act, 2017

Audit by Tax Authorities:

Once the taxpayer meets the above-mentioned conditions for the GST Audit, they are liable to get audited by the tax authority. Here are some related facts for the same-

·         The Central Goods and Services Tax (CGST) or State Goods and Services Tax (SGST) Commissioner or any authorized officer by him can conduct a GST Audit of the taxpayer.

·         The taxpayer is intimated about the audit beforehand, at least 15 days in advance through an issued notice by the authority.

·         The GST Audit of the taxpayer has to be completed within 3 months from the date of the commencement of the audit.

·         The audit period can be extended for a period of six months but not more than that by the commissioner by recording the reasons for the extension in written format.

Also Read: GST Audit for Government Company- What you should know?

Auditee’s obligation:

There are certain obligations on the taxable person during the GST Audit. He/ she is required to-

·         Furnish information and assistance or cooperation to the tax officer for on time completion of the audit.

·         Provide with all the essential or necessary facilities for verification of the financial statements, books of accounts or other documents as may be required.

Audit findings:

Once the GST Audit is concluded, the tax officer is required to inform about the same to the taxpayer within 30 days of the following-

·         The findings of the GST Audit

·         Reasons behind the findings

·         Rights and obligations of the taxpayer as prescribed in the CGST Act, 2017

If, the GST Audit findings state any shortly or unpaid taxes or wrong refund claims or wrongly availed ITC, then the authority can initiate a demand and recovery action against the taxpayer for getting the due taxes.

Special Audit:

The GST Audit that is initiated by an Assistant Commissioner after considering the nature and complexity of the taxpayer’s case and interest on the revenue is called as Special Audit. This type of audit is conducted when during any stage of investigation or enquiry or scrutiny, an opinion is formed that the declared values or ITC availed in the returns is incorrect or wrong. It can be conducted even when the taxpayer has already been audited before.