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In this article let us discuss the provisions relating to Audit under GST laws. But let’s try and understand what the audit is, and what is its significance?
The audit is basically a systematic and independent examination of financial records and accounts of an organization to verify its correctness. If the proper audit is conducted at specified regular intervals, it increases the value and credibility of the organization and builds up investor confidence. The audit can be internal or external.
Internal audit is when the organization keeps a regular track or their functions through analysis, monitoring, and examination of their activities and an external audit is when an outside party like a chartered accountant or any government appointed an officer to conduct this analysis of the financial records of the organization.
Like other laws, GST laws also provide for Auditing provisions. As we have discussed the purpose of the audit is to check the authenticity of the documents and records of the taxpayer registered under GST. A few of the details checked under GST audit are GST invoices declared turnover, taxes paid, refunds and ITC claimed, etc.
Audit under GST can be of the following types:
This audit is not ordered by any tax authority, it is a threshold-based audit requirement. Sub-section 2 of Section 44 under the Chapter of Returns under the CGST Act,2017 states the provisions relating to audit by a taxable person. This section requires any registered taxpayer whose aggregate turnover during a financial year exceeds the threshold limit of Two Crores Rupees are required to get their accounts audited by a chartered accountant or a cost accountant.
They are required to furnish a return in FORM GSTR-9C, which shall include a certified copy of the following:
Chapter XIII of Central Goods and Service Tax Act, 2017 covers the provisions relating to Audit by tax authorities under GST. An audit ordered by tax authorities is of two types;
In an audit conducted by the order of the commissioner, the proper officer along with the team of officers assigned to him verify the correctness of the:
If any discrepancies are found by the proper officer then they are required to communicate the same to the registered taxpayer, who shall furnish his reply in the prescribed manner.
Conditions relating to General Audit
It is the responsibility of the auditee –
Conclusion of General Audit
On the conclusion of Audit under this section, it is the responsibility of the officer to communicate the result and findings along with the rights and obligations of the taxable person to him within 30 days of the conclusion of audit.
Special Audit provisions are mentioned in Section 66 of the CGST Act, 2017. It can be initiated by any officer not below the rank of Assistant Commissioner only when they are not satisfied with the scrutiny, inquiry, investigation or any other proceedings conducted before him. However, it can only be initiated with the proper approval of the Commissioner and the registered taxpayer is required to get their accounts audited through a chartered accountant or a cost accountant nominated by the Commissioner.
Conditions relating to Special Audit
Conclusion of Special Audit
On the conclusion of Audit under this section, the findings are communicated in the Form GST ADT 04.
If after the conclusion of the audit under GST, the proper officer is of the opinion that;
The action must be initiated under section 73 or section 74 of the ACT.
For any other GST related query, contact Enterslice.
Read our article:
Problems of Fake GST Invoice and measures to address them
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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