Under the Goods and Services Tax (GST) framework, an audit is a crucial process aimed at examining records, returns, and other documents maintained by a GST-registered entity. Before knowing how to do GST audit step by step, you must know that the purpose of an audit is to ensure that the taxpayer has correctly calculated and paid taxes, filed accurate returns, and adhered to compliance requirements set under the GST law. By conducting audits, authorities can verify that businesses are accurately reporting and remitting taxes, which helps maintain transparency and minimise tax evasion within the system.
What are the Types of Audits in GST?
The GST audit procedure primarily involves two types:
Audit by Registered Dealer: Taxpayers with an annual turnover exceeding the prescribed limit must undergo a mandatory GST audit conducted by a Chartered Accountant or a Cost Accountant.
Known as the "self-audit," it ensures that taxpayers themselves, through professionals, assess their financial records to confirm accuracy in reporting taxable income, Input Tax Credit (ITC) claimed, and tax paid.
This type of audit is essential to ensure that registered dealers comply with GST rules voluntarily. The audit report, along with the reconciliation statement in Form GSTR-9C, must be submitted by the taxpayer after verification by the appointed auditor.
This audit provides transparency and helps taxpayers correct discrepancies themselves before scrutiny by authorities.
Audit by GST Tax Authorities: The GST law empowers tax authorities to conduct audits to verify the accuracy of returns and compliance with GST provisions by registered taxpayers. Such audits can be either general or specific to certain areas, depending on risk assessments made by authorities.
This audit, conducted by the Commissioner or any officer authorised, involves examining the taxpayer’s books, verifying documents, and inspecting inventory to identify discrepancies or non-compliance.
Authorities may initiate this type of audit if they suspect irregularities or risk in the taxpayer’s profile. Findings from such audits may lead to demands for unpaid taxes or penalties if discrepancies are identified.
This is all about how to do GST audit.
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How To Do GST Audit?
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2024-10-31T09:53:05+00:00 2024-10-31T18:38:55+00:00Comment
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