“Since the beginning of the goods and services tax, taxpayers have been performing their obligations by adhering to the GST Act’s regulations.”
The input and output tax reconciliation, as well as the preparation and submission of an annual return, are requirements for registered businesses. When the taxpayer’s revenue exceeds Rs. 2 Crore, the law also mandates an independent GST audit. In accordance with GST laws, a Chartered Accountant or Cost Accountant must perform a special audit as needed. For GST audit services in India, CAnest provides a skilled team of Chartered Accountants.
The main goal of an audit under GST is to confirm that the company’s claimed turnover, taxes paid, and ITC refunds were all in line with the actual amounts. Inspection of records, returns, and other documents provided by your company are part of a GST audit. The purpose of the GST audit is to determine whether the company is operating in accordance with the GST rules and regulations.
It assists in identifying mistakes like underpaying or omitting to pay taxes and failing to follow legal requirements. It aids in compliance with provisions regarding the taxability of goods and services and locates excess claims made in relation to input tax credits (ITC).
Such mistakes have a significant, and occasionally irreversible, impact on your company, as well as a loss of tax revenue to the government. The GST audit reveals these irregularities and aids in ensuring legal compliance.
We deploy a team of skilled auditors based on the requirements of our clients, who are stationed at the client site and collaborate with the client’s team while maintaining independence and objectivity. We uphold strict guidelines for the hygiene of audit documentation and make sure that any exceptions are routinely reported to the appropriate decision-makers. Our GST audit process includes the following steps:
- Acceptance of Engagement
- Pre-auditing Meeting
- Audit Planning
- Audit Execution
- Audit Report
- Follow Up
According to the Central Goods and Services Tax (CGST) Act of 2017, the taxpayer must submit Form GSTR-9C on or before December 31st of the succeeding financial year.Form GSTR-9C includes two parts viz., Part A and Part B.
Part A is the reconciliation statement with five sections requiring the following information:
- Basic Details
- Reconciliation of the turnover as per the audited annual financial statement with the one declared in the annual return (GSTR-9)
- Tax Payment Reconciliation
- Input Tax Credit (ITC) Reconciliation
- Auditor’s recommendation on additional liability due to non-reconciliation
A certificate under Part B is issued by the auditor attesting to the accuracy of Part A and the information included in the annual return.
Along with the GSTR-9C, the taxpayer must also submit an annual return. He must provide information for inward supplies, outward supplies, ITC reversed, ITC availed, ineligible ITC, HSN summary of inward supplies, HSN summary of outward supplies, and details of demand and refund for the GST annual return.
Examination Of Internal Controls : Our auditors examine the efficiency of the management-instituted internal controls and checks to make sure GST compliance. Internal controls that apply to transactions like sales returns, sales made with customer approval, and job work are also examined for completeness and actual application. Our GST auditors examine the accuracy of the records kept in accordance with GST and offer their recommendations.
Verification Of Records : Our GST Auditors examine the certificate of GST registration, the classification of supplies and services under GST, reverse charge, purchase, sales, stock, expense ledgers, monthly and quarterly returns, and other records kept by the company in accordance with legal requirements.
Reconciliation Of GSTR-3B TO GSTR-1 AND 2A : To confirm that the input tax credit has been legitimately claimed, we cross-check GSTR-3B with GSTR-1 and 2A. We also examine the figures’ mathematical accuracy to look for any discrepancies. We recommend that management make the necessary changes in light of our findings.
Verification of Invoices : We examine the invoices that are sent out to ensure the format complies with the law. After that, we check the calculation’s accuracy and see if the tax rate is applied correctly given the goods and services rendered.
Additionally, we examine purchase invoices to see if they qualify for input tax credits (ITC) and confirm that the total of those credits matches the credit amount stated in the GST return.
Verification of ITC Reversals : If the examined invoice has gone unpaid for longer than 180 days, our GST auditors investigate whether the input tax credit has been reversed.
Compliance of E-Way Bills : When a supply is made using a motor vehicle and has a value greater than Rs. 50,000, we check to see if an e-way bill is generated. They also verify that the invoice and e-way bill agree.
Industry Specific Check :Specific industries are subject to some of the GST provisions. If specific rules are established for your sector, our GST auditors examine the records in more detail.