GST Audit refers to the examination of the returns, records, and other important documents maintained by a taxable individual. Besides confirming adherence to GST provisions, the audit aims to verify the fairness and accuracy of the turnover notified, input tax credit availed, and refunds claimed.
Types of GST Audit
| Types | Conducted By | Circumstance that mandates it |
|---|---|---|
| Turnover based Audit | Cost Accountant or Chartered Accountant appointed by the taxpayer | When the turnover exceeds 2 crores, the taxpayer needs to get his records & accounts audited. |
| Normal Audit/General Audit | CGST/SGST Commissioner or any official empowered by him | On commissioner’s order after the issuance of 15 days prior notice. |
| Special Audit | A Cost Accountant or Chartered Accountant, authorised by Commissioner | On Deputy/Assistant Commissioner’s order after commissioner’s approval. |
Note: As per the notification dated 23 March 2020, businesses with an annual turnover below 5 crores are not required to file GSTR-9C for FY 2018-19.
Threshold for GST Audit
If the turnover of a registered taxable individual during an FY surpasses 2 Crore, they must get their accounts audited by a Cost Accountant or Chartered Accountant. The following documents must be e-filed:
- Annual Return in Form GSTR-9 on or before 31st December of the next FY.
- Certified Reconciliation Statement in Form GSTR-9C, reconciling the declared values with the audited financial statements.
- Audited Annual Accounts copies.
- Other particulars (if specified).
General Audit
General Audit is conducted under Section 65 of the CGST Act by officers authorised by the GST Commissioner. The commissioner issues a general order for conducting an audit of a registered taxable individual. The audit is performed at the business place of the registered taxable person after prior intimation via Form GST ADT-01, at least 15 days before the audit.
- The General Audit must be completed within 3 months from the initiation date.
- In exceptional cases, the GST Commissioner can extend this period by 6 months.
- After completion, the auditor submits a report in Form GST ADT-02 within 30 days.
During the process, the registered taxable individual must provide full cooperation and details, including records, returns, books, inventory, input tax credit availed, and GST rates applied.
Special Audit in New Delhi
A Special Audit is conducted by the Assistant Commissioner when an incorrect value, declaration, or credit amount is found during scrutiny or investigation. Based on the nature & complexity of the case, the special audit can be conducted even if books have already been audited.
- A Special Audit is initiated in writing by the Assistant Commissioner after approval from the Commissioner.
- A Chartered Accountant or Cost Accountant is appointed to carry out the audit.
- The audit report must be submitted within 90 days.
- In exceptional cases, the period can be extended for another 90 days.
- The audit expenses and remuneration of the auditor are paid by the Commissioner.
Post-Special Audit in New Delhi
Upon completion of the Special Audit, the taxable individual is given an opportunity to justify findings. If any unpaid or short-paid tax, or incorrect credit availed is discovered, recovery actions are initiated.
Due Date to Submit GST Audit Report
- 31st December of the subsequent FY is the due date for submitting GSTR-9 and GSTR-9C.
- Note: Due date for filing GSTR-9C for FY 2023-24 has been extended to 30th September.
- The filing of GSTR-9 and GSTR-9C for businesses with turnover up to 2 crores is optional for FY 2023-24 and 2024-25.
Penalty for Non-Submission of GST Audit Report
A general penalty of INR 25,000 applies for non-submission of the GST Audit report. However, no specific penalty has been prescribed by law.
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