GST annual return applicability
As per the Finance Act, 2021, the requirement of GST audit and submission of GSTR-9C as certified by the CA/CMA was removed. As per the 43rd GST Council meeting that was held on 28th May 2021, the GST Council recommended that GSTR-9C may be still submitted as self-certified by taxpayers with an annual aggregate turnover of equal to or more than Rs.5 crore. The CBIC notified this change in Notification No. 29/2021 – Central Tax, dated 30th July 2021.
Need for GST Audit and meaning
Audit under GST involves an examination of records, returns, and other documents maintained by a GST-registered person. It also ensures the correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and assesses other such compliances under GST Act to be checked by an authorized expert.
GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes and file returns. Thus, a robust audit mechanism is necessary to ensure whether the taxpayer has correctly self-assessed his tax liability. Various measures are taken by the government for proper implementation of GST and audit is one amongst them.
Types of GST Audit
| 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 crore,^ the taxpayer has to get his accounts & recoraudited formal |
| Normal audit/General Audit | Commissioner of CGST/SGST or any Officer authorized by him | On order of Commissioner by giving 15 days prior notice |
| Special audit | A Chartered Accountant or Cost Accountant, nominated by Commissioner | On order of Deputy/Assistant Commissioner with prior approval of Commissioner
|
Turnover-based Audit under Section 35(5) of CGST Act
If the annual turnover of a registered taxpayer is more than Rs.2 crore^ in a financial year , he is required to get his accounts audited by a Chartered Accountant or Cost Accountant every year. A financial year covers the 12-month period beginning from April of a calendar year to March of the next calendar year.
Special Note: For the purpose of finding out the turnover limit for Financial Year 2017-18, it has been clarified in the government’s press release dated 3rd July 2019. It shall cover the period 1st July 2017 to 31st March 2018 and excludes the first quarter of FY 2017-18^. For businesses with an annual turnover of less than Rs 5 crore, filing of GSTR-9C for FY 2018-19 is waived off.
Aggregate turnover is calculated as follows:
The total turnover calculation must be PAN-based, which means that once the turnover under the PAN is more than Rs. 2 crore^ all business entities registered under GST for that PAN will be liable for GST audit for a financial year.
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