Description

GST Audit – Meaning, Types, and Requirements

📘 What is a GST Audit?

A GST Audit refers to the examination of records maintained by a registered taxpayer under the Goods and Services Tax (GST) regime. The audit verifies:

• The correctness of information declared,

• The accuracy of taxes paid, and

• The overall compliance with GST laws and regulations.

🔍 Applicability

As per the latest GST rules, every registered taxable person whose annual aggregate turnover exceeds ₹2 crore in a financial year is required to get their accounts audited by a Chartered Accountant (CA) or a Cost Accountant (CMA).

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🧾 Need for GST Audit

The GST system operates on a self-assessment model, where taxpayers:

• Determine their own tax liabilities,

• Pay taxes accordingly, and

• File regular returns.

Since it is a trust-based taxation regime, an effective and robust audit mechanism is necessary to:

• Ensure correctness of self-assessment,

• Prevent evasion or misreporting,

• Strengthen compliance and accountability.

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🏷️ Types of GST Audit

1. Audit by Chartered Accountant or Cost Accountant

• Mandatory for taxpayers whose turnover exceeds ₹2 crore in a financial year.

• The taxpayer appoints a CA or CMA to conduct the audit and submit required reports.

2. Audit by Tax Authorities

• Conducted by a GST officer authorized by the Commissioner.

• A notice is issued at least 15 days in advance before the commencement of audit.

• The audit must be completed within 3 months from the date of commencement (extendable by 6 months if necessary).

3. Special GST Audit

• Ordered when the tax officer believes that a taxpayer has:

  • Understated turnover, or

  • Overstated Input Tax Credit (ITC).

• A CA or CMA is nominated by the Commissioner.

• The cost of audit is borne by the department.

• Findings are communicated through Form GST ADT-04.

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📂 Documents Required for GST Audit

To complete the GST audit, the following documents must be submitted:

1. ✅ Audited Financial Statements

   • Based on the PAN-level of the business entity.

2. ✅ Annual Return (Form GSTR-9)

   • Required for every GSTIN held by the taxpayer.

3. ✅ Reconciliation Statement (Form GSTR-9C)

   • Contains:

     • Part A: Reconciled values of turnover, tax paid, ITC, etc., between audited financials and GSTR-9.

     • Part B: Certification by the appointed CA or CMA.

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🧾 Conclusion

GST audits are vital for ensuring the integrity of the GST framework and promoting transparent tax practices. Taxpayers exceeding the ₹2 crore turnover limit must ensure timely appointment of qualified professionals and submission of the audit reports to remain compliant and avoid penalties.