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Bba GST Unit 4
Bba GST Unit 4
GST
UNIT 4
Audit in GST
Audit under GST involves examination of records, returns and other documents
maintained by a GST registered person. It also ensures correctness of turnover
declared, taxes paid, refund claimed, input tax credit availed and assess other such
compliances under GST Act to be checked by an authorized expert.
Here is the list of documents that need to be audited by the GST auditor:
1. Register of Sales
2. Register of purchase
3. Register of Stock
4. Expenses ledgers
5. Input tax credit (ITC) claimed and utilized
6. GST payable and paid
7. All the e-Way bills generated
8. Any other document or record as may be necessary for that relevant period.
As per the Audit definition under section 2(13) of the Central Goods and Services
Tax (CGST) Act, the GST audit has the following objectives:-
Declared Turnover
Paid Amount of Taxes
Claimed Refund
Availed Input Tax Credit
The inspection also takes place to assess the auditee's compliance with the
laws of the GST Act and its rules.
The objective of the audit under GST is to ensure that the declared turnover,
claimed refunds, input tax credit, and paid taxes are correct. The verification is
done in compliance with the GST Act. Additionally, GST Audit ensures that the
intents comply with GST Rules.
Findings of Audit
On conclusion of an audit, the officer will inform the taxable person within 30 days
of:
the findings,
their reasons, and
the taxable person’s rights and obligations
If the audit results in the detection of unpaid/short paid tax or wrong refund or
wrong input tax credit availed, then demand and recovery actions will be initiated.
Special Audit under GST
When can a special audit be initiated?
The Assistant Commissioner may initiate the special audit, considering the nature
and complexity of the case and interest of revenue.
If he is of the opinion during any stage of scrutiny/ inquiry/investigation that the
value has not been correctly declared or the wrong credit has been availed then a
special audit can be initiated. A special audit can be conducted even if the
taxpayer’s books have already been audited before.
Who will order and conduct a special audit?
The Assistant Commissioner (with the prior approval of the Commissioner) can
order for special audit (in writing). The special audit will be carried out by a
chartered accountant or a cost accountant nominated by the Commissioner.
What is the time limit to initiate a special audit under GST?
The auditor will have to submit the report within 90 days. This may be further
extended by the tax officer for 90 days on an application made by the taxable
person or the auditor.
Who will bear the expenses of the special audit?
The expenses for examination and audit including the auditor’s remuneration will
be determined and paid by the Commissioner.
How are the findings of the special audit dealt with?
The taxable person will be given an opportunity of being heard in the findings of
the special audit. If the audit results in detection of unpaid/short paid tax or wrong
refund or input tax credit wrongly availed then demand and recovery actions will
be initiated.
For further understanding, read our articles on GST audit:
Provisional Assessment
Under section If an assessee is unable to determine his tax liability value or rate he
or she can request the officer for provisional assessment. This further gives two
conditions under which this assessment is done :
If the taxpayer is unable to determine value due to difficulty in calculation of
the transaction value or confusion regarding inclusion of certain receipts or
not.
If the taxpayer is unable to determine the rate of tax due to difficulty in
classification of goods and services or whether any notification is applicable
or not.
The assessee has to request the GST officer for provisional assessments in
writing.
Within 90 days of receipt of such request the officer will pass an order after
reviewing the application. This order is for allowing a payment of tax on
provisional basis or at a GST rate or value specified by him.
The assessee who is making payment on provisional basis has to issue a
bond with a security promising to pay the difference amount between
provisionally assessed tax and final assessed tax.
The GST officer will pass the final assessment within a period of six months
from the date of order of provisional payment.
Provisional assessment will be followed by final assessments.
Summary Assessment
This type of assessment is stated under Section 64. The authorized office is
required to obtain prior permission of additional commissioner or joint
commissioner to take this assessment. To protect the interest of revenue, a GST
officer can proceed to assess the tax liability of a person showing a tax liability
with any evidence . The officer can also issue an assessment order id he has proof
that the delay in assessment can adversely affect the interest of revenue.