As per section 2(13) “audit” means the examination
- Of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made there under or under any other law for the time being in force
- To verify the correctness of-
- Turnover declared
- Taxes paid
- Refund claimed and
- Input tax credit availed, and
- To assess his compliance with the provisions of this Act or the rules made there under.
TYPES OF AUDIT
- TURNOVER BASED AUDIT [SEC. 35(5)]-
Every registered person whose turnover during a financial year exceed the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and ,manner as may be prescribed.
Audit report is to be submitted in form GSTR-9C and the format for the same has been issued vide notification no. 49/2018 dated 13.09.2018
- TURNOVER LIMIT PRESCRIBED UNDER RULE 80(3)-
Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy audited accounts and reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by a Commissioner.
Every registered person whose aggregate turnover during the financial year 2018-19 exceeds five crore rupees shall his accounts audited u/s 35(5) of the Act. [Proviso of Rule 80(3)]
- WHAT IS AGGREGATE TURNOVER [SEC. 2(6)]-
Aggregate turnover means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, export of goods or service or both and Inter-state supplies of person having the same PAN Number, to be computed and all India basis but excludes Central Tax, State Tax, Union territory tax, Integrated tax and cess.
- AUDIT REPORT TO BE FILED WITH ANNUAL RETURN [SEC. 44(2)]
Accordance to sec, 44(2) of the CGST Act, 2017 every person who is required to gets his accounts audited in accordance with the provisions of sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.
- AUDIT BY TAX AUTHORITIES –
- WHO CAN CONDUCT AUDIT [SEC. 65(1)]-
The Commissioner or any officer authorized by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed.
- PLACE WHERE AUDIT MAY BE CONDUCTED [SEC. 65(2)]-
The officer referred to in sub-section (1) may conduct audit at the place of business of the registered person or in their office.
- NOTICE TO BE ISSUED [SEC. 65(3)]-
The registered person shall be informed by way of a notice not less than fifteen working days period to the conduct of audit in such manner as may be prescribed.
- PERIOD FOR COMPLETION OF AUDIT [SEC. 65(4)]-
The audit under sub-section (1) shall be completed within a period of three months from the date of commencement of the audit:
Provided that where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months.
Explanation. for the purpose of this sub-section, the expression “commencement of audit” shall mean the date on which the records and other documents, called for by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later.
- DOCUMENTS TO BE PRODUCED DURING THE AUDIT [SEC. 65(5)]-
During the course of audit, the authorized officer may require the registered person,-
- To afford him the necessary facility to verify the books of account or other documents as he may require;
- To furnished such information as he may require and render assistance for timely completion of the audit.
- INFORMATION ABOUT FINDINGS TO ASSESSEE [SEC. 65(6)]-
On conclusion of audit, the proper officer shall, within thirty days, inform the registered person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings.
- ACTION U/S 73 OR 74 IN CASE OF ANY DISCRIPENCY [SEC.65(7)]-
Where the audit conducted under sub-section (1) results is detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the proper officer may initiate action under section 73 or section 74.
- SPECIAL AUDIT –
- WHEN SPECIAL AUDIT BE CONDUCTED [SEC. 66(1)]-
if at any stage of scrutiny, inquiry, investigation or any other proceeding before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audit by a chartered accountant or a cost accountants as may be nominated by the Commissioner.
- PERIOD WITHIN WHICH AUDIT TO BE COMPLETED [SEC. 66(2)]-
The chartered accountant or cost accountant sop nominated shall, within the period of ninety days, submit a report of such audit duly singed and certified by him to the said assistant Commissioner mentioning therein such other particulars as may be specified:
Provided that the assistant Commissioner may, on an application made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, extend the says period by a further period of ninety days.
- OPPORTUNITY OF BEING HEARD TO DEALER [SEC.66(4)]-
The registered person shall be given an opportunity of being heard in respect of any, material gathered on the basis of special audit under sub-section (1) which is proposed to be used in any proceeding against him under this Act or the rules made there under.
- REMUNERATION TO AUDIT TO BE PAID BY COMMISSIONER [SEC.66(5)]-
The expenses of the examination and audit of the records under sub-section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determined shall be final.
- ACTION U/S 73 OR 74 IN CASE OF ANY DISCRIPENCY [SEC. 66(6)]-
Where the special audit conducted under sub-section (1) results in detention of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the proper officer may initiate action under section 73 or 74.