With the implementation of Goods and Services Tax (GST) in India from July 1, 2017, there has been a paradigm shift in indirect taxation s...
With the implementation of Goods and Services Tax (GST) in India from July 1, 2017, there has been a paradigm shift in indirect taxation structure in India from origin-based tax to destination based tax. Section 35(5) read with Section 44 and Rule 80(3) of Goods and Services Tax (GST) Laws provides that every registered person, whose aggregate turnover during a financial year exceeds two crore rupees, is required to get his/her accounts audited. The copy of audited annual accounts and a reconciliation statement, duly certified, in Form GSTR-9C has to be submitted on or before the 31st Day of December by the tax payer.
In this regard, the Government has notified Form GSTR-9C on 13th September, 2018 comprising Reconciliation Statement and Certification, which needs to be certified by the Chartered Accountants.
Now, our members have an opportunity as well as responsibility to assist the assessees in filing the statutory Form 9 and also in conducting the GST Audit. In view of the importance of the matter, the Indirect Taxes Committee of ICAI has come out with this ‘Technical Guide on Annual Return & GST Audit’. This Guide has been comprehensively designed and contains clause-by-clause analysis of Form GSTR-9, 9A and Form GSTR -9C. I am confident that this publication will be of great significance and will provide assistance to our members on the critical issues arising while conducting audit. I request my professional colleagues to equip themselves and exercise due care while certifying this Form.
I appreciate the efforts put in by Chairman and all members of the Indirect Taxes Committee of ICAI for undertaking this tedious task and coming out with ‘Technical Guide on Annual Return & GST Audit’ in such a short span of time. I am sure that our members and others would find this publication immensely useful. Date: 16.10.2018
CA. Naveen ND Gupta President, ICAI
The Goods and Services Tax regime is revolutionary in the realm of commodity taxes and services tax. It has brought about a paradigm shift in the methodology of levy and collection of taxes. It is an internationally recognized multipoint tax system providing for levy of tax on goods as well as services on the value addition occurring at every stage of business activity. GST being in the nature of a self-assessment tax, audit procedures are introduced for error correction and ensuring proper compliance.
This Technical Guide on Annual return & GST Audit is a written attempt to create awareness among the trade/ industry and more importantly for the members to discharge their professional duties. Members would be assisting the smaller clients in filing GSTR-9. Further they would be carrying out the audit under section 35(5) along with drawing up reconciliation statement as required under Section 44(2) of CGST Act, 2017 in Form GSTR-9C and certifying the same for those with a turnover over 2 Crores.
An attempt has been made in this guide to cover areas that are related to the basic principles, policies and special issues pertaining to conduct of a Goods and Services Tax Audit; drawing up reconciliation statement in Form GSTR-9C and certifying; assistance in filing GSTR-9 Form. This paper does not deal with legal interpretations and rulings. This does not contain answers to all the problems that may arise in the day-to-day audit work. In such cases, the GST auditor may have to apply his mind judiciously, keeping in view the intent behind the law, principles and policies.
The practical difficulties faced in filling these forms have been highlighted to the Government which are available at http://idtc.icai.org/budget-memorandum.html . Answers to them are awaited from the Government.
Future changes in the GST Acts, Rules thereon, administrative policies and procedures may require changes to this guide from time to time.
The members who have already started assisting in filing of the Form-9 or conduct of the GST audits and those planning to start immediately could refer to this guide and offer the practical issues arising therefrom.
While, the general scheme of audit, the detailed steps, filling of forms and certification are outlined in the main part of the book, the references and sample documents are incorporated in Annexure and Appendix such as Standard Audit Program, Check list, Audit Working Papers, Notifications, etc. Therefore, these documents should also be perused to understand the entire gamut of the audit scheme under the GST Laws.
We are happy to acknowledge the support and assistance rendered by study group members, members of core group namely CA. S Venkatramani, CA. A. Jatin Christopher, CA Rajesh TR,CA. Gaurav Gupta, CA. Venugopal Gella, CA Shubham Khaitan , CA. Abhay Yagnesh Desai, CA. Hiren Pathak, CA Yash Daddha, , CA. Virender Chauhan , CA. Bishan Shah, CA Vinamar Gupta, CA. Kapil Vaish and other members of the committee. Last but not the least, I appreciate the dedicated efforts of entire Secretariat of Indirect Taxes Committee.
CA. Madhukar N. Hiregange Date: 16.10.18 Chairman Indirect Taxes Committee
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S. No. Title Page No.
1. Introduction to Goods and Services Tax Audit 1
2. Appointment of Auditor 12
3. Audit Approach (Audit Planning, Strategy and Execution) 23
4. Important Aspects for GST Audit of Multi-Locational Entities 32
5. Accounting Standards and Ind-AS 37
6. GST Audit in Computerised Environment 49
7. Insights on Input Tax Credit under GST 60
8. Important Aspects to Know 76
9. Analysis of GSTR-9 84
10. Analysis of GSTR-9A 256
11. Analysis of GSTR-9C 274
Appendix 1 : Provisions of CGST Act, 2017 and IGST Act,2017 as which are relevant for Audit. 415
Appendix 2 : Form GSTR 9 425
Appendix 3 : Form GSTR 9A 439
Appendix 4 : Form GSTR 9C 447
Appendix 5 : Council’s Resolution on part time practice 462
Appendix 6 : Disclosure of substantial interest 464
Appendix 7 : Professional Ethics & Misconduct 468
Appendix 8 : Professional misconduct- acceptance of other work in which appointed as Auditor 484 Appendix 9 : Suggested format for Appointment Letter 486
Appendix 10 : Suggested Audit Checklist 490
Appendix 11 : List of Auditing Standards issued by the ICAI 507
Appendix 12 : List of Accounting Standards notified by the Central Government 511
Appendix 13 : Letter of Management Representation 513
Appendix 14 : Abbreviations 520