A brief overview on GST Audits

GST audits

In today’s topic, we’ll have a brief overview on GST audits. GST audits happens to check if the GST payable is correct and whether the refund is claimed or not for certain taxpayers. The audit conducts when the annual turnover exceeds than Rs. 2 crores on the goods and services sale.

There are different types of audits such as Turnover based Audit, General Audit, Special Audit.

  • Turnover based Audit held when the annual turnover exceeds Rs. 2 crores by the taxpayer. In this audit, a Chartered accountant is appointed.
  • General audit held after orders are passed through the commissioner. 15 days notice period is a must. In this, CGST or SGST commissioner is appointed.
  • Special audit held after order is passed the GST Commissioner to the Assistant Commissioner. Chartered Accountant is appointed in special audits.

The audit conducts for every GST annual return. This audit includes the details the sales, purchase, stock balance register, input tax credit and other records and the documents which taxpayers handle. The aim of the audit to check if the tax paid is right, refund claimed or not. The company should get the audit done so that they don’t get into any loss of credits, any interest/late fees, etc.

GST audits.


Updates on GST Audits as 23rd March 2020:

  • Due date for recording GSTR-9 and GSTR-9C is extended up till 30th June 2019 by CBIC for FY 2018-19
  • For taxpayers with a yearly turnover below Rs 5 crores, documenting of GSTR-9C for FY 2018-19 to be postponed off
  • For taxpayers with Rs. 2 crores annual turnover in FY 2017-18 and FY 2018-19 no penalty will be for late filing of GSTR-9

*Subject to CBIC notice

8th December 2018:

Due date for recording GSTR-9, GSTR-9A and GSTR-9C is extended up till 30th June 2019 by CBIC for FY 2017-18

Audit Approach

Every registered taxpayer who is under GST and whose annual turnover of a financial year surpassed by Rs. 2 crores (As per current guidelines of government) have to get the GST audit done by a chartered accountant (CA). He should get some files printed:

  1. a yearly return (annual return) through the GSTR-9 type by 31st December of the succeeding financial year,
  2. the copies of all the annual accounts that have been audited by your chartered accountant,
  3. a reconciliation statement which is certified under GSTR-9C, concluding all the supply value which is in return with the financial statement of the annual audit,
  4. and other specifics if required.


Corrections to Returns after GST Audits

If the registered taxable person, after presenting a return found any error/omissions from the audit results, they can correct subject to payment of interest. Nonetheless, no amendment will be permitted after the due date of the return for the long stretch of September or second quarter, (by and large), following the finish of the financial year, or the real date of documenting the significant yearly return, whichever is prior.

Details of the audit by tax authorities

  • Any commissioner of CGST/SGST (or any officer at the point) will perform the audit of the registered taxpayer. The constancy how the audit will hold will describe later.
  • There will be a notice period of 15 days before the audit will be held for the taxpayer.
  • The audit will be finished within 3 months of the audit begin
  • The audit can be extended to up to 6 months by the commissioner because of any reasons but in writing.

Auditee’s Responsibility For GST Audits

There will be some responsibility of the auditee (the taxpayer) to complete the audit as:

  • he should provide the details required by the audit authority
  • he should give assistance to get audit complete within the time limit
  • he should provide good facilities about the books and other documents, whatever is needed by auditors

Reasons for GST Audits

The audit commissioner will have to provide the conclusion of the audit to the taxpayer within 30 days of

  • the reasons,
  • the detections,
  • the respective taxpayer’s rights and responsibilities

If any findings of unpaid taxes/less tax paid or any wrong refund tax credit, then improvised actions will be taken.


Special Audit

When a special audit can be held?

A special audit will be held by the assistant commissioner or the assistant officer, examining the complication and the nature of the case and the amount of interest. On the off chance that he is of the sentiment during any phase of enquiry/request/examination that the credit has not been effectively announced or some unacceptable credit has profited then the extraordinary review can be started. The special audit will be held only when the taxpayer’s books are already audited.

Who can conduct and give the order for the Special Audits?

An assistant commissioner (assigned by the main commissioner) can give orders and can conduct a Special Audit (should be in writing). This Special Audit will be completed by a chartered accountant or cost accountant whichever the Commissioner will appoint.

Time limit to complete the GST Audits

The Assistant Commissioner has to submit the report within 90 days. If they have to extend it they can extend the report by 90 days on writing an application by the taxpayers or the auditor itself.

Expenses in GST Audits

GST Audit expenses differ by the complexities of the case. The expenses for conducting the audit including auditor’s payment will be paid by the Chartered Account which Commissioner has assigned.

Reasons for Special Audits

Special audits conduct when financial management is been disturbed by the taxpayer. The taxable person will have a chance of being heard of the reasons for Special Audit. If any findings of unpaid taxes/less tax paid or any wrong refund tax credit, then improvised actions will be taken.

Special Audits is a strong verified way for the GST officers under the assistance of a Chartered Accountant to decide the responsibility of tax in serious cases. Good guidance of a CA will be a safeguard for the interest amount of the taxpayer and be legal.

Overall, GST is a fully new government tax which has been started in India rapidly. Taxpayers will summon in the transformation and application of the GST.

Apply for GST Registration online with us.