All about GST Audit

Last Updated On: Oct. 23, 2020, 8:55 p.m.



GST Audit means inspecting records, GST returns, and other documents that are furnished by the taxpayers. GST Audit is carried out to have a check on the turnover, taxes paid, ITC claimed and iTC availed mentioned in their annual report are true or not. GST Audit helps in evaluating whether the taxpayer is compliant with the GST provision.


Who is eligible for audit under GST?

Any registered taxable person whose annual *aggregate turnover exceeds 2 Crore INR during a financial year needs to get their accounts audited. The eligible taxpayer can get their records and account audited either by a CA (Chartered Accountant) or a CWA (Cost and Work Accountant).

It shall be noted that the audit under GST is carried out state-wise. This is the reason why a separate GST audit is done for each unique registrations under the same Permanent Account Number (PAN).


Types of GST Audit under the CGST Act 2017

Types of Audit When is it carried out? Carried out by whom?
Turnover based It is carried out when the aggregate turnover of the taxpayer exceeds the 2 Crore INR mark. CA or CWA appointed by the taxpayer
General Audit It is carried out after the order is passed by the commissioner. However, it is important to give 15 days prior notice. CGST or SGST commissioner or any other person authorized by them.
Special Audit It is carried out after the order is passed by the deputy or assistant commissioner after the prior approval of the GST commissioner Chartered Accountant (CA) or Cost and Work Accountant (CWA) appointed by the commissioner.



Normal Audit u/s 35(5):

  • As per section 35(5) of Central Goods & Service Tax Act 2017, every registered person under the GST act whose turnover during a financial year exceeds the prescribed limit of 2 crores shall get his accounts audited by a chartered accountant or cost accountant and shall submit a copy of audited annual accounts or the reconciliation statement under subsection (2) of section 44 (GSTR-9C) and such other documents in such form and manner which shall be prescribed in the form.
  • The contained above statement shall apply to any department of Central Government or a State Government or a local authority, whose books of accounts are subject to audit by Auditor General of India and Comptroller or an auditor who is appointed for auditing of the company accounts of local authorities under any law for the time being in force.
  • Audit by tax authorities u/s 65
  • As per section 65 of the CGST Act 2017, The Commissioner or any authorized officer by him, by way of the general or specific order, may undertake the audit of any registered person or a registered company for such period, at such frequency and in such manner as prescribed.
  • The registered person or a company shall be informed by way of notice which is not less than fifteen working days prior and the audit shall be completed within the three months period from the date of commencement. However, the commissioner may extend the period by a further period not exceeding six months if he is satisfied that the audit cannot be completed within the three months.
  • The proper officer shall inform the registered person or a company about the findings, his rights, and his obligations, within 30 days of the conclusion of the auditing period.

Special Audit u/s 66:

  • As per section 66 mentioned in the CGST Act 2017, any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the Assistant Commissioner, having regard to the complexity of the particular case, with the priority of the Commissioner approval, direct such registered person will get his records and books of accounts audited by chartered accountant or cost accountant as nominated by the Commissioner.
  • The nominated or a selected chartered accountant or cost accountant shall submit his audit report within a period of 90 days to a particular officer or an Assistant Commissioner. However, the Assistant Commissioner may extend the said period of 90 days by further 90 days for any material and sufficient reason made to him by chartered accountant or cost accountant or registered person.
  • The expenses of the examination and audit of records, including the remuneration of chartered accountant or cost accountant shall be determined and paid by the commissioner.
  • The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of the special audit.

Copyright © 2019 - All Right Reserved