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Audit under GST Regime

  • — by CA. Ena Kansal

(The author is a Practicing Chartered Accountant and a renowned Trainer with an exposure in Direct and Indirect Taxes. She has delivered several presentations at ICAI, ICSI and other professional forums on topics pertaining to GST. Author can be reached at gst@apurvkansal.co.in or 8109825451)

 

(Only for Private Circulation)

Audit under GST is the process of examination of records, returns and other documents maintained by a taxable 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.

 

Types of audit under GST

Audit by Chartered Accountant or Cost Accountant

Every registered person whose aggregate turnover during the financial year exceeds the prescribed limit i.e. Rs. 2 Crore shall get his accounts audited by Chartered Accountant or Cost Accountant and shall submit a copy of audited annual accounts, the reconciliation statement and other documents along with the GST annual return.

 

Audit by Tax Authorities

 

Who will order and conduct audit?

The Commissioner or any officer authorized by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed. Audit may be conducted at the place of business of the registered person or in the office of the Commissioner or officer authorized by him.

 

Prior Notice:

A notice will be sent to the registered person at least 15 days prior to the conduct of the audit.

 

Time limit:

The audit shall be completed within a period of 3 months from the date of commencement of the audit. The Commissioner can extend the audit period for a further period of 6 months with reasons recorded in writing.

 

Obligations of the Auditee:

The Registered person will be required to provide the necessary facility to verify the books of account/other documents as required and to give information and assistance for timely completion of the audit.

 

Findings of Audit:

On conclusion of an audit, the officer will inform the registered person within 30 days of the findings, their reasons, and his rights and obligations. If the audit results in detection of unpaid/short paid tax or wrong refund or wrong input tax credit availed, then demand and recovery actions will be initiated.

 

 

Special Audit

 

When can a special audit be initiated?

The Assistant/Deputy Commissioner may initiate special audit, considering the nature and complexity of the case and interest of revenue. If he is of the opinion during any stage of scrutiny/enquiry/investigation that the value has not been correctly declared or the wrong credit has been availed then special audit can be initiated.

 

Who will order and conduct special audit?

The Assistant/Deputy Commissioner (with the prior approval of the Commissioner) can order for special audit (in writing). The special audit will be carried out by a chartered accountant or a cost accountant nominated by the Commissioner.

 

Time limit for special audit

The auditor will have to submit the report within 90 days or within the further extended period of 90 days.

 

Cost 

The expenses for examination and audit including the auditor’s remuneration will be determined and borne by the Commissioner.

 

Findings of special audit

The registered person will be given an opportunity of being heard in findings of the special audit. If the audit results in detection of unpaid/short paid tax or wrong refund or input tax credit wrongly availed then demand and recovery actions will be initiated.


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