According to Section 35 (5) of the CGST Act, registered taxpayers in India whose aggregate turnover is over two crores in a financial year (FY) must have their accounts book audited by an authorized Cost Accountant or a Chartered Accountant. This requirement is in place to ensure compliance with the law. Using Form GSTR 9C, the taxpayer registered for GST must provide a copy of the GST audit report, financial statements and a reconciliation statement. At least once each fiscal year, the engaged taxpayer must provide the information to the tax department.
Need Of Auditing Under GST
The Goods and Services Tax (GST) audit aims to evaluate the returns, records, and other relevant documents that a person registered under GST keeps. An authorized member of the Tax authority must do a GST audit to verify the accuracy of the provided information and determine whether or not it complies with the GST Act of 2017. This must be done before the audit can be considered complete.
Under the Goods and Services Tax (GST) program, which the Government of India initiated in 2017. Taxpayers can calculate their tax burden, submit an Income Tax Return (ITR), and pay their tax obligations under this taxation system. An audit under the GST is necessary to confirm that the taxpayer has appropriately assessed it.
Three Kinds Of GST Audits
Under the Goods and Services Tax (GST), three kinds of audits exist. The following audits, together with their prerequisites, are described below:
Audit Of GST Percentage Based On Turnover:
The taxpayer is responsible for appointing or hiring a Cost Accountant or Chartered Accountant to carry out this audit on their behalf. This kind of audit is required by the CGST Act to be carried out if a taxpayer’s annual turnover exceeds the threshold of 2 crores, and the taxpayer is required to obtain audits for their records and accounts.
Regular or General Audit of the GST:
This Goods and Services Tax examination is carried out by either the CGST/SGST Commissioner or any other authorized officer. It is carried out under an order from the Commissioner and with prior notification to the taxpayer of 15 days.
Special GST Audit:
This examination is carried out by either a Cost Accountant or a Chartered Accountant approved by the Commissioner. It is carried out under an order from either the Assistant or Deputy Commissioner and has been authorized in advance by the Commissioner.
What Kinds of Accounts Does an Auditor Check for Accuracy?
The following are some of the accounts that an auditor looks at during their examination of a taxpayer:
The Auditor will examine the sales register.
The Auditor will examine the Stocks Register.
The Auditor will examine the Purchase Register.
The Auditor is going to go through the Expense Register.
The Auditor will look at how much credit and ITC were used, how much was accessible, and how much was accounted for.
The Auditor will investigate whether or not the production tax was paid.
The Auditor will check e-bills created during the GST period to ensure that they comply with the relevant regulations.
During the fiscal year, the Auditor will investigate any communications, papers, records, and other materials sent to the relevant GST department.
Why You Should Go with Fyient Global?
Ensuring that tax returns, records, and documentation comply with the GST’s laws and audits cannot be overstated. It is essential to prepare for the audit in advance by making an appointment and planning it either before the beginning of a financial year or in advance. In addition, it is of the utmost importance that the audit reports for GST be conducted objectively and not by a registered GST payer. Therefore, if you need any GST Audit services, Fyient Global is the appropriate company you can rely on for all those needs.