GST or Goods and Services Tax is a unified tax system implemented in India to replace multiple indirect taxes such as excise duty, service tax, VAT, etc. GST is regulated by the Central Goods and Services Tax Act, 2017 (CGST Act). GST audit under the CGST Act, 2017 is a mandatory compliance requirement for businesses operating in India. In this article, we'll discuss everything you need to know about GST audit under the CGST Act, 2017.
GST Audit is a regulatory requirement that mandates the verification and validation of the GST returns filed by businesses. It is a process of scrutinizing the accounts and records maintained by businesses to ensure compliance with the GST regulations.
There are three types of GST audit:
Annual GST audit is a mandatory compliance requirement under the CGST Act, 2017 for every registered person having an annual turnover of more than Rs. 2 crore. The annual GST audit needs to be conducted by a certified chartered accountant or a cost accountant.
A Special GST audit is conducted by an officer authorized by the Commissioner if there is a reason to believe that the business has not correctly disclosed the output tax liability or availed the input tax credit. The officer needs to issue a notice to the business owner and request a special GST audit to be conducted.
A Departmental GST audit is initiated by the GST department to verify the compliance of a business with the GST regulations. The department may issue a notice to the business owner and request a departmental GST audit to be conducted.
The process of GST audit involves the following steps:
The first step in the process of GST audit is filing of GST returns. The registered person needs to file the GST returns in Form GSTR-9C along with the audited financial statements, reconciliation statement, and other relevant documents.
The auditor needs to prepare the GST audit report in Form GSTR-9C after verifying the accounts and records maintained by the business. The auditor needs to ensure that the GST returns filed by the business are correct and complete.
The registered person needs to verify the GST audit report prepared by the auditor and confirm the accuracy of the same. The registered person also needs to sign the audit report.
The final step in the process of GST audit is filing of the GST audit report with the GST department. The registered person needs to file the GST audit report along with the audited financial statements, reconciliation statement, and other relevant documents with the GST department.
There are certain important compliances that businesses need to follow to ensure compliance with the GST regulations:
GST audit is an important compliance requirement for businesses operating in India. The process of GST audit involves the verification and validation of the GST returns filed by businesses. There are three types of GST audit - Annual GST Audit, Special GST Audit, and Departmental GST Audit. Businesses need to ensure compliance with the GST regulations by maintaining accurate records, filing GST returns within the due date, conducting the GST audit within the due date, cooperating with the auditor, verifying the audit report, and filing the GST audit report with the GST department.
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