- GST Audit if Turnover > Rs. 200 Lac
- GST Tax Audit helps to identify legal non compliances
- GST Audit helps in process improvement
- GST Audit
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Meaning of Audit is defined under section 2(13) of CGST Act 2017. Government introduced from GSTR9C for conducting GST Audit. For GST Registered persons whose turnover during the year exceed two crore for them GST Audit Applicable. As per explanation of Section 35(5) of CGST Act 2017 GST Audit applicable. GST Act defined GST Audit as examination of GST Returns ,records and other documents. GST audit purpose is to do Verification of GST paid, return filed , turnover disclosed and refund claimed.
Aggregate Turnover = All taxable supplies + exempt supplies + export of goods or services + inter or Intra state supplies of person under one PAN. ( Excludes central tax, State tax, Union territory tax, integrated tax and cess.( Exempt supply includes nil rated supplies , specific supplies by notification non taxable etc. )exempt supply under GST is a broad term which includes nil rate supplies, non-taxable supplies and specific supplies which are notified as exempt from tax.
GST Audit Turnover Limit
As per GST Act Every registered person who turnover for period 1.07.2017 to 31.03.2018 exceed two crore required to get GST audit compliance. Per need to obtain GST audit certification from the Chartered Accountant or Cost Accountant. Aggregate turnover for GST Audit is already defined in above para. Its important to note that aggregate turnover includes supplies of nil rated , exempt supplies , export of goods or services , supplies to SEZ units. But this turnover excludes Central, State , Union taxes. GST was in force from 01.07.2017 , suitable explanation in required from government for which period should be take for calculation turnover for financial year 20171-18.
GST Audit Check List
Following shall be documents , ledger Check list for GST Audit
- Ledger of GST Outward Supply
- Ledger of GST inward supply
- RCM Ledger
- GST Return filed GSTR3B, GSTR 1,GSTR2
- GST Input tax credit ledger
- Working of Trans credit & Trans returns
- Financial statement of Company
- Leger for reimbursement from employees etc.
- Capital goods addition details
- GST refund applied & received
- Statement of GST payment via challan
GST Audit Process
Where turnover for financial year cross Rs. 2 crore such registered person need to get involved in GST Audit Process. First company need to identify turnover and audit applicability. GST audit certification need to be done by practicing Chartered Accountant or Cost Accountant. GST Audit Process may involve verification of GST returns filed , GST cash and electronic ledger, input tax validity , GST Refund applied , received, reconciliation of different GST ledgers. Validate correctness of GST liability declared , CGST/SGST/IGST cross utilization etc. From company to company different GST Audit process can be followed to validate required information.
Penalty Under GST Audit
As per the penalty provisions of GSTR 9C audit return form, the taxpayer has to pay Rs. 200 per day as a penalty in which Rs. 100 consist of SGST and Rs. 100 for CGST. Also, it is to be noted that the total penalty cannot exceed 0.25% of the total turnover on which the said penalty is being levied.
Types of GST Audits
GST Audit by CA or CMA
GST Audit by CA or CMA requried for every person whos turnover exceed Rs. 2 Crore ruppes during the financial year. They need to get accounts audited by CA / CMA.
Audit by Tax Authorities
GST Audit may be undertaken as prescribed by The Commissioner or any officer for such persons at frequency and manner as mentioned Section 65 of CGST Act.
Special GST Audit
Officer of rank above Assitant commissioner is of opinion tha the value has not been correctly declared or the credit availed he may appoint CA / CMA for Special GST Audit.
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FAQ- GST Audit
Yes. As per GST law, GST audit need to conducted by Chartered Accountant/Cost Accountant Where turnover exceeds Rs.200 lac.
Yes. Section 2(6) of CGST/ SGST Act defines aggregate turnover to include ‘inter-state supplies of person having same PAN.
Yes. aggregate turnover’ includes even exempted supplies.
No. GST Law have no provision for revising GST audit form GSTR 9C.
Form GSTR 9C consists of 2 parts. Part-A – Reconciliation statement Part B is Certificate by CA/ CMA.
Yes, GST is applicable on supply. Also company need to mention ITC Reversal as per section 18(6) of CGST Act.
GSTR 9C provides for auditors recommendation on additional liability wherein liability arising on account of non-reconciliation of ITC has to be remitted in cash. Whether cash will include payment through ITC as well is yet to be clarified by the Government.