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Published on:
February 20, 2023
By
Paramita

In-depth Audit Programme & Checklist for conducting GST Audit

Goods and Services Tax (GST) Audit is a comprehensive review of a business's financial records related to GST. The GST Audit is conducted to ensure that a business is following all the GST rules and regulations, and to identify any discrepancies or irregularities in the GST returns. The audit is conducted by a Chartered Accountant or a Cost Accountant who is appointed by the taxpayer.

As per the GST Act, an audit is mandatory for taxpayers whose annual turnover exceeds Rs. 5 crore. For taxpayers with an annual turnover of less than Rs. 5 crore, the audit is optional but recommended.

What is an In-depth Audit Programme?

An In-depth Audit Programme is a systematic approach to conducting a GST audit. It involves a detailed review of all the financial records related to GST and ensures that the audit is conducted efficiently and effectively. The In-depth Audit Programme comprises of the following:

  1. Planning of the GST audit
  2. Preparation of the audit programme
  3. Conducting the audit
  4. Reporting the findings of the audit

Checklist for conducting the GST Audit

The GST Audit Checklist is a tool that helps in the systematic review of all the financial records related to GST. The checklist ensures that all the relevant documents are available for review, and the audit is conducted as per the GST rules and regulations. The following are the key elements of the GST Audit Checklist:

1. Relevant GST Returns

The GST audit starts with the review of the relevant GST returns. The following returns are to be reviewed:

  • GSTR-1: Outward supplies
  • GSTR-3B: Monthly summary return
  • GSTR-9: Annual return
  • GSTR-2A: Auto-populated return for inward supplies

The Chartered Accountant or the Cost Accountant should ensure that the values in the returns match with the books of accounts and the GST invoices issued and received.

2. Input Tax Credit (ITC) Records

The next step is to review the Input Tax Credit (ITC) records. The Chartered Accountant or the Cost Accountant should ensure that:

  • The ITC claimed is eligible under the GST rules
  • The ITC claimed matches with the books of accounts
  • The ITC claimed is not in excess of the eligible amount

3. Tax Payment Records

The next step is to review the tax payment records. The Chartered Accountant or the Cost Accountant should ensure that:

  • The taxes are paid as per the GST rules and regulations
  • The taxes paid match with the books of accounts and the GST returns
  • The interest and penalty, if any, are paid as per the GST rules and regulations

4. Books of Accounts

The Chartered Accountant or the Cost Accountant should review the books of accounts to ensure that they are maintained as per the GST rules and regulations. The following books of accounts should be reviewed:

  • Purchase Register
  • Sales Register
  • Stock Register
  • Input Tax Credit Register
  • Output Tax Liability Register

5. Valuation of Goods and Services

The Chartered Accountant or the Cost Accountant should review the valuation of goods and services to ensure that the correct value is declared in the GST returns. The following should be reviewed:

  • Discounts offered
  • Supply of goods and services without consideration
  • Transactions with related parties
  • Transactions with distinct persons

6. Compliance with the GST Rules and Regulations

The Chartered Accountant or the Cost Accountant should ensure that the taxpayer is complying with all the GST rules and regulations. The following should be reviewed:

  • Registration under GST
  • Issuance of GST invoices
  • Timely filing of GST returns
  • Compliance with the e-way bill system

Conclusion

The In-depth Audit Programme and the Checklist are essential tools for conducting a GST audit efficiently and effectively. The Chartered Accountant or the Cost Accountant should ensure that all the relevant documents are available for review, and the audit is conducted as per the GST rules and regulations. The audit findings should be reported to the taxpayer, and appropriate action should be taken to rectify any discrepancies or irregularities.

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Updated on:
March 16, 2024