GST audits involve the examination of records, returns, and other documents maintained by GST-registered persons.
Additionally, it checks the accuracy of turnover declared, taxes paid, refunds claimed, input tax credits availed, and other such compliance under GST Act.
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Taxpayers, whose annual turnover is more than Rs. 2 crores in a financial year, are required to get audited by CA every year, under Section 35(5) of the CGST Act.
As per the 5th July 2022 meeting, CBIC has exempted GST-registered taxpayers from filing Form GSTR-9 with an annual aggregate turnover of up to Rs.2 crore in FY 21-22.
For certain categories of taxpayers, GST audits are necessary to examine whether GST is being paid correctly and refunds are being claimed.
As guided by the Finance Act, 2021, the requirement of GST audit and submission of GSTR-9C by CA was removed.
When GSTR 9C is mandatory?
GSTR 9C is mandatory for taxpayers with a turnover exceeding Rs. 5 crores in the previous financial year on a self-certification basis.
GST Auditor must digitally sign GSTR-9C and report any discrepancies or liabilities in GST returns filed during the financial year.
The GSTR-9C is a reconciliation statement between:
- GSTR-9 Annual Returns filed for an FY, and
- the figures as per the audited annual Financial Statements of the taxpayer.
There are two main parts of GSTR-9C:
- Part-A: Reconciliation Statement
- Part-B: Self-certification
Who is eligible for GSTR 9 and 9C?
Under GST, all registered taxable persons must file the GSTR-9 form annually.
GST reconciliation Statement for a particular FY on or before 31st December is the GSTR-9C.
Companies with a turnover of more than 5 crores must also have the reconciliation certified by a CA.
Difference between GSTR-9 and GSTR-9C are:
| GSTR-9 | GSTR-9C | |
| TYPE | GSTR 9 is a Return Form | GSTR-9C is a Reconciliation Statement |
| GST ACT | Prescribed in Rule 80 of under Section 44 of the CGST Act | Prescribed in Section 35(5) of Section 44 of the CGST Act |
| PARTS | GSTR-9 has Six Parts. | GSTR 9CPart A – Reconciliation Statement-five parts part B – Certificate-two parts. |
| Prescribed under a Statute | Prescribed under a Statute | |
| ELIGIBILITY | To be filed by all Registered Taxpayers under Goods and Services TaxOnly For FY 2021-22T.O. Up to 2 Cr – OptionalMore than 2Cr. – 5 Cr – MandatoryMore than 5Cr – Mandatory | To be filed if the turnover in an FY exceeds Rs 2CrOnly For FY 2021-22T.O. Up to 2 Cr – N/AMore than 2Cr. – 5 Cr – OptionalMore than 5Cr – Mandatory |
| SIGNATURE | Digitally signed by the Registered Taxpayer. | Digitally signed by the GST Auditor (CA/CMA) |
| THRESHOLD | No Threshold | Subject to Threshold |
| ANNEXURES | Financials need not be annexed | Financials need to be annexed |
| GSTR-9 Must be filed before GSTR-9C | GSTR-9C has to follow the GSTR-9 annual return | |
| DUE DATE | Must be filed on or before 31st December subsequent For FY 2021-22 | Same as GSTR-9 For FY 2021-22 |
| LATE FEES | The minimum is Rs 100 under CGST & 100 under SGST i.e Total Penalty is Rs 200 per day. The Maximum penalty can be a quarter percent of the taxpayer turnover | Section 125 of CGST Act, 2017 states a penalty of up to Rs 25,000/- for not getting the accounts audited |
What is tax audit in GST?
A tax audit in GST is all about checking and verifying the financial documents maintained and submitted to the tax authority under GST.
According to the GST Act, 2017, registered taxpayers are required to have their account books audited.
There are three types of audits:
| Types | Performed By | When Initiated |
| Turnover based Audit | Chartered Accountant or Cost Accountant appointed by the taxpayer | As per the CGST Act, if the Turnover exceeds 2 crores,^ the taxpayer has to get his accounts & records audited |
| Normal audit/General Audit | Commissioner of CGST/SGST or any Officer authorized by him | On the order of the Commissioner by giving 15 days prior notice |
| Special audit | A Chartered Accountant or Cost Accountant, nominated by Commissioner | On the order of the Deputy/Assistant Commissioner with prior approval of the Commissioner |
What is the turnover limit for GST audit for FY 2020-21?
The turnover limit is Rs. 2 crores. As per CBIC, GST-registered taxpayers with annual aggregate turnover up to Rs. 2 crores in FY 21-22 from filing Form GSTR-9.
What are GST audit requirement for FY 2021-22?
Mandatory requirements of GST audit for the financial year 2021-22
1. HSN-related summary of outward supplies must be reported in Table 17.
HSN code reporting is required for taxpayers with annual turnover up to 5 Cr at a 4-digit level and for taxpayers with annual turnover above 5 Cr at a 6-digit level.
2. RCM ITC details for unregistered and registered vehicles must be reported separately in Tables 6C and 6D.
3. GST-free supplies must be reported separately on Form GSTR-9, Table 5F.
4. Table 9, ‘Tax Amount’ and ‘Tax Amount’ must be completed.
5. Exports and deliveries to SEZs with tax must be reported separately, as well as credit notes, debit notes and adjustments (if any) related to B2B deliveries. However, B2C deliveries must be reported without debit/credit notification.
What is GST audit time limit by department?
Tax authorities conducting an audit-
The department can carry out a GST audit of any registered person. Either the registered person`s place of business or the tax authority’s office may conduct such an audit.
It is necessary to notify the registered person about the audit’s conduct before it begins by sending a notice in Form GST ADT-01. The audit notice should be issued at least 15 working days before the audit.
Some of the taxpayer’s responsibilities during the audit are as follows:
- Allow the authority to verify books of accounts and other documents.
- Provide all necessary information.
- Provide adequate assistance in completing the audit on time.
- Such an audit must be finished within 3 months (with a maximum extension of 6 months) of the date the audit began.
The audit findings will be provided to the taxpayer in Form GST ADT-02.
Special Audit–
Prior to conducting the special audit:
- Initiating audits, investigations, investigations, or other proceedings against taxpayers.
- An officer (not below the rank of Deputy Commissioner) believes that either the value was misclaimed or the input tax credit was used in excess of the allowable amount.
- Prior approval of the Commissioner is required.
Once all prerequisites have been met, the officer will direct the designated Chartered Accountant or Cost Accountant to review the books of accounts on Form GST ADT-03. The audit must be completed by the commissioned auditor within 90 days (and she can extend up to 90 days). The Chartered/Cost Accountant must submit a report in the form of GST ADT-04 upon completion of the audit.
What is GST audit penalty for FY 2021-22?
The GST Audit Report contains no specific provisions. However, the authorities must pay a fine of Rs. 25,000. However, a taxpayer whose annual income is below the threshold of 5 Crore and exempted from filing a GST return in GSTR 9C form in the financial year 2018-19 will not be subject to the penalty.
What is GST annual return turnover limit for FY 2022-23?
As of the fiscal year 2022-23, if 95% of total cash receipts and payments are in digital mode, the company’s audit threshold is capped at INR 10 crore.
Frequently Asked Questions (FAQs):
Who is exempt from tax audit?
Businesses whose total sales, turnover, or gross receipts do not exceed Rs 2 crore in a financial year are not subject to a tax audit.
When GST audit is done?
GST audit is conducted by the Commissioner or any officer authorized on this behalf.
Notice shall be given to the registered person at least 15 days prior to the conduct of the audit.
The time limit to complete the audit is three months from its commencement date.
What is turnover limit for GSTR 9C?
The turnover limit is Rs. 2 crores. It is mandatory to file GSTR 9C, whose annual aggregate turnover exceeds Rs. 2 crores.
Wrapping Up
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