GST compliance for audit in India is an important requirement for businesses falling under specific criteria as per the Goods and Services Tax (GST) laws. The GST audit aims to ensure that taxpayers comply with the GST regulations, maintain proper records, and accurately report their financial information. Here are the key points to understand about GST compliance for audit in India:
1. Applicability of GST Audit:
GST audit is applicable to businesses whose aggregate annual turnover exceeds ₹5 crores during a financial year. Businesses meeting this threshold are required to undergo a GST audit
2. GST Audit Certificate by Chartered Accountant or Cost Accountant:
The GST audit must be conducted by a qualified Chartered Accountant or a Cost Accountant. After the audit, the auditor issues a GST audit report in the prescribed format (Form GSTR-9C).
3. Due Date for GST Audit Report:
The due date for filing the GST audit report (Form GSTR-9C) is generally the same as the due date for filing the annual return (Form GSTR-9). As of my last update in September 2021, the due date for both was 31st December of the following financial year.
4. Information Covered in GST Audit Report (Form GSTR-9C):
The GST audit report includes the reconciliation of the taxpayer's annual financial statements and the GST returns filed during the financial year. The auditor verifies the correctness and accuracy of the information provided in the GST returns and financial statements.
5. Components Checked During GST Audit:
The GST auditor examines various aspects during the audit, including:
- Correctness and completeness of reported turnover in GST returns.
- Accuracy of input tax credit (ITC) claimed and availed.
- Reconciliation of ITC between books of accounts and GST returns.
- Compliance with GST valuation rules for related party transactions.
- Proper maintenance of GST records and invoices.
6. Rectification of Discrepancies:
If any discrepancies or errors are identified during the GST audit, the taxpayer is required to rectify the errors and report the adjustments in the subsequent GST returns.
Taxpayers must retain relevant documents and records, including invoices, purchase registers, financial statements, and GST returns, for at least 6 years from the due date of filing the annual return.
9. Importance of Professional Assistance:
Conducting a GST audit requires in-depth knowledge of GST laws and accounting practices. Businesses should seek assistance from qualified Chartered Accountants or Cost Accountants to ensure a smooth and compliant GST audit process.
It is essential for businesses falling under the GST audit criteria to comply with the audit requirements, maintain proper records, and ensure accuracy in their GST returns and financial statements. Seeking professional guidance from qualified auditors is recommended to navigate the complexities of GST compliance for audit in India.
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