The Goods and Services Act of 2017 brought the Goods and Services Tax (henceforth abbreviated as GST) to India. It’s an indirect tax kind that aims to include all other indirect tax kinds into itself. Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (GST) are the three different forms of GST.

What does Audit mean?

An audit is defined as “the examination of records, returns, and other documents maintained or furnished by the registered person under this Act or the rules made under any other law for the time being in force in order to assess his compliance with the provisions of this Act or the rules made thereunder and to verify the correctness of turnover declared, taxes paid, refund claimed, and input tax credit availed.”

The process of auditing involves the authorities authorised by the GST Act, 2017 verifying numerous papers, some of which may be connected to tax returns, among other things.

Types of GST Audit

There are three types of GST Audit:

  1. GST Audit done by independent chartered accountant
  2. Audit done by tax authorities
  3. Special GST Audit

GST Audit by independent chartered accountant

A GST audit is only available to taxable income persons whose annual turnover in the relevant fiscal year exceeds two crores. A GST audit is not permitted for any business organization whose annual turnover is less than this amount. The GST audit minimum is this. That kind of person has to be a licensed dealer. He or she is in charge of ensuring that their books of accounts and tax return are audited by an impartial certified accountant. The aforementioned audit must be electronically reported to the tax authorities via the GST site by filling out Forms GSTR 9 and GSTR 9C. Currently, the deadline for such a submission is the last day of December of the next fiscal year. Certain documents must be kept handy by the auditee, they are as follows:

  1. All the books of accounts.
  2. Accounts of all the goods produced or manufactured.
  3. Information about goods or services inward.
  4. Infromation about goods or services outward.
  5. Input tax credit availed if any.
  6. The stock of goods.

In addition to the aforementioned documents, the taxpayer must also submit a compliance sheet and an auditor’s statement, so these two should not be forgotten when preparing the GST checklist.

The GST Act, 2017 too gives for a plausibility to correct blunders and exclusions, in case the auditee recognizes a few post submission of the review of the chartered bookkeeper online. But, in these cases, the auditee is obligated to pay a certain sum of interest.

GST Audit by Tax Authorities

A citizen can be subject to the GST review by a person appointed as the Commissioner of CGST or SGST, or another official with the authority. In any case, such an review may as it were be commenced on the off chance that the citizen has been appropriately informed, i.e , 15 days earlier to the graduation of the review. The GST review due date or the time period that’s accessible to such a assess specialist for planning his GST review report is three months or 90 days from the day of graduation of the review. The GST Act, 2017, does give for the expansion of the said time constrain in extraordinary circumstances. The charge specialist may expand the time by a period of six months; in any case, in that case, he/she is additionally obliged to outfit in composing, the reasons for the same. Since there are no endorsed reports beneath the GST Act, 2017 for such an review, in that, it is carried out at the watchfulness of the citizen, in this manner the citizen is obliged to outfit all those archives for confirmation, that the specialist may inquire for. One of the major commitments on the citizen in such circumstances is to arrange with the assess specialist in arrange to empower opportune completion of the whole handle of the review. Be that as it may, the taxpayer is such cases, is additionally entitled to know the discoveries of the evaluator and the reasons for the same, inside a month after the completion of the whole process of the GST review.

Special GST Audit

The Central GST commissioner may authorize, in composing, the Central GST Collaborator Commissioner to carry out a uncommon GST review. The right hand Commissioner is to at that point advance assign another individual, which may be chartered or a taken a toll bookkeeper, to really carry out the extraordinary GST review. The qualification criteria for such an inspector is that he/ she must at slightest be a chartered bookkeeper or a fetched bookkeeper. Be that as it may, one limitation is that such reviewer cannot, in parallel act as a enlisted GST specialist. Comparable to an review by the charge specialists, the reviewer within the moment case moreover, should have a time period of 3 months or ninety days in arrange to donate in his or her GST review report. In case of a extraordinary review, the GST Commissioner embraces to bear all the costs and costs of the whole prepare, which too incorporates the compensation to be given to the chartered bookkeeper or the fetched bookkeeper, as the case may be. In case the evaluator, amid his examination, comes over occasions of deviations and non-compliance, he/she is entitled to start activities for recovery. In any case, earlier to this, the auditee has the correct to be listened on the conclusions arrived at by the inspector.

Offences under GST

21 offences are there under GST. To make you understand better they are divided in following groups:

  1. Forge Invoices:

The taxable person supplies any goods/services without an invoice or prepares a false invoice. He prepares all invoices without supply of goods/services as per GST provisions. He prepares invoices using another bona fide Taxpayer Identification Number.

  • Fraud:

In order to avoid paying taxes, he may provide false financial documents or tax returns and refrain from disclosing information during legal proceedings.

  • Tax Invasion:

For 3 months, he submits GST but fails to report it to the government. Even if he collects GST as per the rules, he still has to deposit it with the government within 3 months. Failure to do so is an offense under GST. He fraudulently recovers all CGST/SGST payments. He takes and/or utilizes input tax credit without actually receiving the goods and/or services. He deliberately suppresses sales to avoid tax.


Under GST Act, 2017:

Amount     1-2 Crore2-5 CroreAbove 5 Crore
Time of ImprisonmentUp to 1 YearUp to 3 YearsUp to 5 Years
Fine  In all three casesIn all three casesIn all three cases

Spersh Gupta(Legal Intern)

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