Auditing Under GST
Under Section 65(1) of the CGST Act, 2017, there is a mention of Auditing under GST. As per the Act, any commissioner or other officer authorized by him/her may undertake an audit of any registered person for such period, frequency, or way as prescribed. Audit means an examination of records, returns, and other documents maintained by a registered taxpayer. It aims to verify the correctness of declared turnover, taxes paid, refund claimed and input tax credit availed.
Auditing under GST is done only after a prior intimation from the authorities. The auditing is conducted by an authorized officer and his team of officials. It checks the records on which the books of accounts, returns, and statements are managed or prepared by a taxpayer. To get complete knowledge on auditing under GST, this article has covered all the aspects, therefore continue on the page.
Threshold Limit for Auditing Under GST
Each registered taxpayer who has noted an annual turnover of more than Rs 2 Cr has to get the books of accounts audited by a chartered accountant or a cost accountant. They also must file the following returns and records electronically to meet legal compliance under the GST
- Annual return in GSTR 9
- Audited copy of annual accounts
- Reconciliation statement in GSTR 9C
Document/Records Required for GST Auditing
As per the rules, some general documents or records are required before the auditing is started. The following details are to be presented at the principal place of business, true and correct account of
Other particular records or documents are needed depending on the nature of the business or service.
Auditing under GST Procedure
Issue of Notice– authorities can issue a notice to the taxpayer asking them to provide information supporting the returns.
Conduct of Audit– authorities can conduct an audit to verify the correctness of records. It can either be done on-site or off-site.
Issue of Assessment Order– based on information received from the notice and audit, authorities can issue an assessment order to specify the final amount of tax to be paid by the taxpayer.
Rectification of Errors– in case of disagreement, a taxpayer can request rectification of errors within 30 days of receiving receipt of the assessment order. Authorities will review the request and revise the order as per the case.
Appeal– If the taxpayer is still dissatisfied with the order, they can appeal to the appropriate appellate authority.
Issuance of ADT-02
To sum up the records of auditing, authorities issue GST ADT-02 to inform about the findings of the audit within 30 days. The GST ADT-02 has reasons for such findings about the records, rights, and obligations.
Before the auditor prepares the ADT-02, they will discuss all the objections with the taxpayer but his views are considered as a participative fact-finding exercise. It is the auditor’s responsibility to explain all the objections before it is finally issued.
How to Avoid SCN out of GST Audit?
GST implements a pre-consultative mechanism to avoid show cause notice. This mechanism helps the taxpayer to understand and accept the liabilities and obligations without contesting the show cause notice.
- GST officer issues Form GST DRC-01A to inform the taxpayer about the interest and penalty, and tax chargeable
- The GST officer will explain all the details about the dues to the taxpayer and once the GST DRC-01A is issued, a taxpayer is permitted to make submissions
- The taxpayer may consider to pay the dues and submit GSTAM-X without contesting the SCN
- If the final submissions by the taxpayer provide complete clarification, the officer will proceed further to conclude the proceedings
- If the clarifications are not satisfactory, then the GST officer will proceed further with the show-cause notice
Get Started with TaxDunia
If you have received a SCN from the GST officers, reach out to TaxDunia. Our professionals will communicate with the authorities on your behalf and ensure smooth legal compliance for you. If you do not take any action about the show cause notice, then you may be penalized. Let us connect today so that you can concentrate on your work and we can address your issues.
