Audit under GST: What is GST Audit, Types of GST Audit & More

GST Audit is a process that helps check whether the taxpayers registered under Goods and Services Tax (GST) have fulfilled their GST obligations. GST is an efficient taxation system where you are required to self-evaluate your tax obligations, pay taxes, and file returns. After this, the GST Audit is conducted either by a specialised government auditor or via a self-audit process by the business entity itself (those with an annual turnover of Rs 5 lakhs or above). It is crucial to make sure that you follow all the GST rules and regulations in order to avoid fines or penalties.

According to the GST Act, 2017, registered taxpayers in India having proper registration and a turnover of more than Rs. 5 crores in a financial year are eligible for audit under GST. All such persons are required to have their books audited by an authorised professional auditor, like a Chartered Accountant or a CMA. After audit, the following documents/details must be provided by the taxpayer/auditee to the tax department via GST portal:

• Annual return (GSTR-9)
• Reconciliation statement (GSTR -9C)
• Copy of audited records
• Any other documents, if and as needed

Given below are the reasons why GST audit is important for businesses:

• GST Audit is very important for ensuring that businesses are conforming to the GST rules
• It helps figure out the areas where modifications can be made
• Ensures proper record filing and tax being paid - on time, every time
• Helps detect any fraudulent undertakings or discrepancies in the finances of a company, thus saving it from possible GST penalties in future

The following are the 2 types of audits under GST:

According to the Central Goods and Services Tax (CGST) Act, an audit under GST has the following objectives:

• For the securitisation of tax returns, financial records, and other similar documents
• To ascertain whether the returns, records and other documents are maintained as per the GST laws
• Audit under GST aims to ensure that the claimed refunds, declared turnover, input tax credit, and paid taxes are accurate
• To verify the correctness of Input Tax Credit availed (must be compliant with GST Act, 2017)

The following table shows the types of offences that individuals make and the types of penalties charged:

Mentioned below are the documents that taxpayers need to furnish for GST audit:

• GSTIN-oriented Form GSTR-9 led Annual Return
• PAN-oriented Financial Audited Statements
• Reconciliation Statement Certificate via Form GSTR 9C