GST regime focuses on self-assessment of tax liability by the taxpayers for which certain obligations are cast on the taxpayer for maintaining accounts and records.
Audit under GST is the process of examination of records, returns and other documents maintained by a registered person. The purpose is to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed and to assess the compliance with the provisions of GST laws.
The following types of audits are prescribed under the GST laws:
1. Audit by a Chartered Accountant or a Cost Accountant
2. Regular audit by the Commissioner or any officer authorised by him / her
3. Special Audit by the GST authorities
This Alert summarizes applicability relating to GST Audit by a Chartered Accountant / Cost Accountant:
- Every registered person having an aggregate turnover exceeding INR 20 million (i.e. Rs. 2 crore) during a financial year should get his accounts audited by a Chartered Accountant or a Cost Accountant.
- “Aggregate Turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-state supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes Central Tax, State Tax, Union Territory Tax, Integrated Tax and Cess.
- · As per the above definition, the aggregate turnover of all the GST registered branches within India under the same PAN should be included in calculating the threshold limit of Rs 2 crore. Once the threshold limit is achieved, audit report is required to be filed for every GST registered branch in respective State separately.
- Audit Report shall be furnished in Form GSTR-9C along with audited Annual Accounts, GST Annual Return and Reconciliation Statement in Form GSTR-9D on or before 31st December following the end of the financial year (for FY 2017-18, the due date is 31stDecember 2018). The Government is yet to prescribe the format and contents of the Audit Report and Annexures.
- It is advisable that the taxpayers should be ready with a reconciliation of amount reported in the audited financials (State-wise) with the GST Annual Return (State-wise) for undertaking GST audit compliance.