A SYNOPSIS OF GST AUDIT PROVISIONS
The term audit has been defined under section 2 (13) of the CGST Act, 2017. In simple terms, GST audit means examination / verification of records, returns and documents maintained by the registered taxpayer. GST audit is conducted in order to confirm the correctness of turnover, tax payable and paid, input tax credit availed, refund claimed and analysis of due compliance of the provisions of the Act.
Types of GST audits and relevant sections / rules are being tabulated hereunder for ready reference
|Types of GST Audits||Relevant section / rules of the CGST Act, 2017 / CGST Rules, 2017|
|Audit by registered taxable person||Section 35 (5) and rule 80 (3)|
|Audit by tax authorities||Section 65 and rule 101|
|Special audit by tax authorities||Section 66 and rule 102|
AUDIT BY REGISTERED TAXABLE PERSON
In specified cases, the registered taxable person is suo moto required to get their accounts audited under GST. The applicability of the same is explained hereunder
-The registered person whose aggregate turnover, during a financial year, exceeds INR 2 Crore is required to get his accounts audited; [Those taxpayers having an annual turnover of up to Rs 2 crore in FY 2017-18 or FY 2018-19, may choose to not file GSTR-9, from the date to be notified by CBIC. However, they must continue to file annual returns for FY 2019-2020 onwards.]
-The audit can be conducted by a chartered accountant (CA) or a cost accountant (CMA);
-The registered person, at the time of filing of its annual return, is required to submit the following documents
a.) Copy of the audited annual accounts; and
b.) Reconciliation statement in FORM GSTR-9C; and
c.) Any other applicable documents.
It is important to note here that, the registered person is required to submit all the above documents at the time of filing of an annual return in FORM GSTR-9. The due date of filing of an annual return in FORM GSTR-9 is 31st December of the preceding financial year, however, the due date for filing of first annual return for Financial Year 2017-2018 has been extended up to 30th Nov, 2019.
Concluding thereby that if the registered person is required to suo moto get its accounts audited under GST, he is required to get its accounts audited and submit the requisite documents at the time of filing of an annual return in FORM GSTR-9.
AUDIT BY TAX AUTHORITIES
Tax authorities can conduct an audit of the registered person. Such an audit can be conducted by the Commissioner or on his order, by any other officer. The audit can be conducted either at the office of the tax authorities or at the place of business of the registered person.
Prior to the commencement of an audit by the tax authorities, it is mandatory that the registered person is informed about the conduct of an audit. Tax authorities are required to issue anotice in FORM GST ADT-01, informing commencement of audit, at least before the period of 15 working days.
GST audit so initiated by the tax authority is required to be completed within a period of 3 months from the date of commencement of the audit and any the findings of the audit needs to be conveyed, in FORM GST ADT-02, to the registered person within a period of 30 days.
SPECIAL AUDIT BY TAX AUTHORITIES
-If the officer (not below the rank of the Assistant Commissioner) may direct special audit considering the nature and complexity of the case and the interest of the revenue.
-Special audit can be initiated if the officer is of the opinion that the value declared is not correct or input tax credit availed is not within the normal limit.
-Officer, before directing the registered person, is required to obtain prior approval of the Commissioner.
-After approval from the Commissioner, the officer shall issue direction in FORM GST ADT-03 to the registered person to get his accounts / records audited by a chartered accountant (CA) or a cost accountant (CMA) as nominated by the Commissioner.
-The appointed CA or CMA is required to submit a report of an audit, to the Assistant Commissioner, so conducted within a period of 90 days.
-The registered person is required to be informed about the findings of the special audit in FORM GST ADT-04.