yearly GST Audits (Goods & Services Audit)
Introduction
The biggest reform in the history of India in the field of indirect taxation was brought by 101st Constitutional Amendment. It introduced the Good and Service Tax Act. The introduction of Good and Service Tax Act has replaced many indirect taxes that were levied in the country such as excise duty, service tax, additional Custom duty and State level VAT and Octroi. Like in every law there are some checks and balances, so is in the GST through GST Audit.
GST Audit includes examination of books of accounts, records, returns and other documents maintained by the registered person. It also ensures other compliances of GST act. It helps in ensuring correct assessment of Turnover, ITC claimed, refund claimed and GST paid.
Types of GST Audit
In GST there are 3 types of audit
Audit by Commissioner under sec 66 of the CGST Act 2017
Special Audit under section 66 of the CGST Act 2017
Turnover based audit by Chartered Accountant or Cost accountant under section 35
As per section 35(5) of the Central Goods and Service Tax Act 2017 “Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant…”. Turnover during the financial year includes value of Inter-State as well as intra-state supplies, value of exempt supplies and value of export supplies and value is calculated PAN India basis. The limit prescribed is 5 crore. Generally, the due date for filing of the GST Audit by the professional is 31 Dec of the subsequent financial year.
Procedure
For conducting a GST audit, a professional would require following records
Purchase Register
Sales Register
Stock of Goods
Input Tax Credit Availed
Output Tax Payable paid
Statement of E-way Bill generated
After receiving all the records, auditor would
Reconcile books of accounts, returns and the annual return filled by the company.
Check whether all GST compliances are followed by the company
Assesse GST liability or refund for the Financial Year
After processing all the data and auditor will prepare reconciliation of turnover, output liability and input credit claimed.
Consequences of Non Filing
If the taxpayer fail to file the GST-9C within due date, then he is liable to fee of Rs. 200/- per day subject to maximum of 0.5% of turnover.
General Audit Procedures (Yearly)
Audit of Opening Balance as per Singed Balance sheet Vs Opening balances in Tally
Audit of Yearly Sales as Per 3B vs Sales as per R1 Vs Sales as per 26AS
Audit of Stock Value as on 31st March of year close and corresponding & quantity
General Audit Procedures (Monthly)
GST R1 (sales) as per GST vs Sales R1 as per Tally.
GST R2 (Purchase) as per GST vs Sales R2 (Purchase) as per Tally.
Audit of GST Payment Ledger Vs GST Payable (Paid Leder) in Books of Accounts.
Audit of GST Payable Ledger in tally Vs Monthly GST 3B filled and recording differences in Narration of the voucher.
General Audit Procedures (Quarterly)
Audit of Company master - Address actual vs Income Tax, TDS, GST, ROC & IEC Department Records.
Audit of Company master - List of Directors actual vs Income Tax, TDS, GST, ROC & IEC Department Records.
GST R2 (Purchase) as per GST vs Sales R2 (Purchase) as per Tally. (for Quarterly Inputs.
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