As per section 2(13) audit” means an examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder 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 thereunder;
Let's understand the meaning of audit in simple language, audit is
Audit under GST can be categorised into these three categories
|Which section covers turnover based audit ?||Section 35(5) of CGST Act|
|When it is required ?||Registered person whose turnover exceeds Rs. 2 crore, the taxpayer is required to get his accounts audited|
|Who can conduct this audit ?||Chartered Accountant or Cost Accountant (appointed by taxpayer)|
|What is the time limit to complete the audit ?||31st December of the subsequent fiscal year|
|Other points||Reporting is required in Form-9C|
|Which section covers general audit ?||Section 65 & Rule 101|
|When it is required ?||By specific order of commissioner or any officer authorised by him by 15 days prior notice|
|Who can conduct this audit ?||Commissioner of CGST/SGST or any Officer authorized by him|
|What is the time limit to complete the audit ?||Audit shall be completed within 3 months (Further extension of 6 months may be given)|
|Other points||Findings of audit shall be reported in Form GST ADT-02|
|Which section covers special audit?||Section 66|
|When it is required ?||Assistant commissioner in case of scrutiny, enquiry, investigation or any other proceedings may direct for special audit with prior approval of commissioner|
|Who can conduct this audit ?||Chartered Accountant or Cost Accountant (nominated by commissioner)|
|What is the time limit to complete the audit ?||Audit shall be completed within 90 days (Further extension of 90 days may be given)|
Each registered person is required to get his accounts audited whose turnover during a financial year exceeds Rs. 2 crore by a chartered accountant or cost accountant.
After reading this, one may come up with so many confusions like whether turnover has to be considered branch wise or PAN based Whether exempt supplies also included in the calculation of turnover and so on
Let’s understand "What is the meaning of Turnover "
The definition of turnover is not defined anywhere under GST law however the meaning of Aggregate Turnover is given under section 2(6) which define the turnover as follows :Includes:
of persons having the same PAN, to be computed on all India basisExcludes:
In the absence of any definition of turnover in the Act, and specific reference of the term ‘aggregate turnover’ gives indication that turnover to be considered at all India level.
The need of reconciliation statement arises as the annual return is prepared based on transactions reported during the year in various return wherein supply of all nature required to be reported, whereas the books of accounts maintained based on seperate principles.
There may be many transactions which may take place in Annual return but not in the books of accounts like treatment of trade discount, credit notes, unadjusted advances, unbilled revenue etc. hence the reason to bring reconciliation statement is to find out the differences and reasons for such differences.
The due date of furnishing GST Audit Report is 31 December, 2019 of subsequent fiscal year.
However, the due date of furnishing GST Audit Report for F.Y. 2017-18 is 30 November, 2019 which was extended from 31st August, 2019
Previously the due date was 30th June, 2019 which was extended from 31st December, 2018.
There is no specific penalty given for non-compliance of provisions of GST Audit however general penalty may be imposed in case of non-compliance of Rs.25,000/- given under section 125 of CGST and SGST Act.
|GSTR 9 is a form for GST Annual Return.||GSTR-9C is a form for GST Audit.|
|GSTR-9 was mandatory for all registered taxpayers. However, in 37th GST council meeting, filing of GST annual return became optional for taxpayers whose turnover is upto Rs. 2 crore.||GSTR-9C is required to be filled by taxpayers whose aggregate turnover exceeds Rs. 2 crore in a financial year.|
|This is consolidation of GST returns.||This is a reconciliation & certification from the auditor.|
|It is not required to be certified by a CA or Cost Accountant||It is required to be certified by a CA or cost accountant.|
|No documents/annexures are required to be submitted along with GSTR-9.||Audited financial statements are required to be submitted along with GSTR-9C.|
|Penalty Rs. 200/- per day or 0.25% of total turnover (whichever is lower)||There is no specific provision given for penalty but general penalty u/s 125 of Rs. 25,000/- may be levied.|
The reconciliation statement is divided in two parts :
Part I : seeks basic details about the registered person like FY, GSTIN, legal name, trade name. It is also required to mention whether registered person is liable to be audited under any other Act.
Part II : This part requires the reconciliation of turnover declared in audited financial statement with turnover declared in Annual Return. There may be so many reasons for such differences.
Part III : This part deals with reconciliation of taxes paid
Part IV :Reconciliation of Input Tax Credits as per books of account and ITC as declared in the Annual Return
Part V : This part requires the auditor to recommend additional liability arising due to non-reconciliation. The additional liability has been mentioned separately under various categories of rates of tax, input tax credits, interest, late fees, penalty, any other amount not included in the GSTR-9, erroneous refund to be paid back and outstanding demands to be settled.To read more click here.
GSTR-9C can be downloaded from www.gst.gov.in, from offline tools under download tab.
Audited financial statements are required to be enclosed along with audit report in Form GSTR-9C.
Yes, Form GSRT-9 & GSTR 9C needs to be filled separately.GSTR-9C is certified and digitally signed by a CA or Cost Accountant.
No, it is not mandatory for Chartered Accountant to be registered as a GST practitioner to certify GSTR-9C
As of now, there is no such notification issued by the government but in future Government may waive off the late fee by issue a notification.
The definition of Turnover is very vast. It includes exempt supplies as well hence in the above case,GSTR-9C is required to be filled