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What is Audit under GST?

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Under GST, the phrase “audit” refers to the examination of a registered taxable person’s records, returns, and other documents. The goal is to ensure that the declared turnover, taxes paid, refund claimed, and input tax credit claimed are valid.

Also Read: GST Consultancy Services

What is the threshold limit for Audit under GST?

According to the GST Council’s applicability provisions. Any registered taxable person whose annual revenue exceeds INR 2 crore should have his accounts audited by a chartered accountant or a cost accountant. As a result, he will electronically file:

  • By the 31st December of the next Financial Year. The annual return, Form GSTR-9, as well as the reconciliation statement, must be filed.
  • A copy of the annual audited financial statements.
  • The value of supplies declared in the annual return and the audited annual financial statement are reconciled in this statement.
  • Other specifics as directed.

GST Audit in General

Any registered taxable person can be subjected to a general GST audit by a Commissioner or any officer authorised by him. The following are the essential factors to keep in mind when conducting a general GST audit:

  • The tax audit will take place at the registered person’s office or place of business.
  • A notice about the tax audit will be sent to the person at least 15 working days before the audit date.
  • The tax audit will be finished within three months of the start date, i.e. the audit must be completed within 90 days.
  • If the Commissioner believes the audit cannot be completed in three months. The time of tax audit might be extended for additional six months. The justifications for the extension must be documented in writing.
  • Following the completion of the tax audit. The tax officer must notify the registered person of the results, reasons for the findings. And his rights and obligations within 30 days.
  • If the tax audit uncovers unpaid tax, underpaid tax, incorrect refunds, or input tax credits that were improperly obtained or utilised. The tax officer will take steps to reclaim the money.

Special GST Audit

If an officer or Assistant Commissioner believes the value of tax has not been correctly declared or the erroneous credit has been claimed at any point during the scrutiny, enquiry, or investigation process. He or she can conduct a special GST audit with the Commissioner’s prior consent. The following are the essential elements to remember when conducting a special GST audit:

  • Even if the taxpayer’s books have already been audited, a special audit can be done.
  • The registered person will be directed to have his or her accounts audited by a Chartered Accountant or Cost Accountant nominated by the Commissioner under special audit.
  • The costs of the inspection and audit, including the auditor’s fee, shall be determined and paid by the Commissioner.
  • The GST tax audit report must be submitted by the nominated Chartered Accountant or Cost Accountant within 90 days. On an application by the taxable person or the auditor. The tax officer can extend this period for another 90 days.
  • Following the special audit’s conclusions, the taxable person will have the option to be heard and present arguments.
  • If the special audit uncovers unpaid tax, underpaid tax, incorrect refunds, or incorrectly claimed or used input tax credits, the tax officer will take steps to recover the money.

Corrections to the return based on the findings of the GST audit

If a taxable person discovers an omission or erroneous detail after filing a return. He can remedy it using the audit results, but he will have to pay interest. However, after the tax filing for the month of September, or the second quarter following the end of the financial year, or the actual date of tax filing of the applicable annual return – whichever comes first – no rectification will be allowed.


Suggested Read: GST Registration

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