GST Audit
A GST Audit is a thorough examination of GST returns, records, and other documents maintained by a taxable individual. The purpose of the audit is to ensure compliance with GST laws and verify key financial details, including:
- Turnover declared
- Input tax credit (ITC) availed
- Refunds claimed
- Tax liability paid
The audit ensures that the taxpayer has correctly followed the provisions of the GST Act and that the financial records are fair and accurate.
Types of GST Audit
| Type | Conducted By | Mandating Circumstance |
|---|---|---|
|
Turnover-based Audit
|
Cost Accountant or Chartered Accountant appointed by the taxpayer
|
Mandatory if turnover exceeds ₹2 crores; taxpayer must get records & accounts audited.
|
|
Normal/General Audit
|
CGST/SGST Commissioner or an official authorized by them |
Conducted on the commissioner’s order with a 15-day prior notice. |
|
Special Audit
|
Cost Accountant or Chartered Accountant, authorized by the Commissioner
|
Ordered by Deputy/Assistant Commissioner with approval from the Commissioner.
|
Threshold for GST Audit
If the annual turnover of a registered taxable individual exceeds ₹2 crores, they must get their accounts audited by a Cost Accountant or Chartered Accountant. The following documents must be e-filed:
- Annual Return (Form GSTR-9) – Must be filed on or before 31st December of the next financial year.
- Certified Reconciliation Statement (Form GSTR-9C) – Reconciles declared values in returns with audited financial statements.
- Copies of Audited Annual Accounts
- Other particulars (if specified).
General Audit under GST
- Conducted under Section 65 of the CGST Act by GST officers authorized by the Commissioner.
- Prior notice (Form GST ADT-01) must be issued at least 15 days before the audit.
- The audit is conducted at the business premises of the registered taxpayer.
- Must be completed within 3 months from initiation (extendable by 6 months in exceptional cases).
- Upon completion, a report (Form GST ADT-02) is submitted to the Relevant Department (RD) within 30 days, summarizing findings.
Taxpayer’s Responsibility:
During the audit, the taxpayer must provide full cooperation and submit all necessary records, including:
- Returns & books of accounts
- Statements & deductions
- Inventory records
- Details of Input Tax Credit (ITC) availed
- GST rate applied
Special Audit in India
A Special Audit is conducted by the Assistant Commissioner when any incorrect declaration, incorrect valuation, or excess credit availed is identified during scrutiny or investigation. Even if the taxpayer’s books have already been audited, a special audit can still be ordered depending on the complexity of the case.
- The Assistant Commissioner initiates the audit in writing, with prior approval from the Commissioner.
- The Commissioner appoints a Chartered Accountant or Cost Accountant to carry out the audit.
- The auditor must submit the special audit report within 90 days. This period can be extended for an additional 90 days upon request by the taxpayer or the auditor.
- The Commissioner bears the cost of the audit, including the auditor’s remuneration.
Post-Special Audit in India
- Once the special audit is completed, the taxpayer is given an opportunity to justify discrepancies found in the audit.
- If the audit reveals any unpaid or short-paid tax, or excess credit availed, recovery actions are initiated as per GST regulations.
Due Date for Submitting GST Audit Report
- The due date for filing GSTR-9 and GSTR-9C is 31st December of the subsequent financial year.
- The due date for filing GSTR-9C for FY 2023-24 has been extended to 30th September.
- For businesses with a turnover up to ₹2 crores, filing GSTR-9 and GSTR-9C has been made optional for FY 2023-24 and 2024-25.
Penalty for Non-Submission of GST Audit Report
- A general penalty of ₹25,000 is applicable for non-submission of the GST audit report. However, no specific penalty has been prescribed under the law.
- For assistance with GST returns and related processes, feel free to reach out—we’re here to help!