Audit Provisions under Goods and Services Tax (GST) Act
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- 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;
- Compulsory Audit
- Audit by Tax Authorities
- Special Audit
- Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited by a chartered accountant or a cost accountant as specified under sub-section (5) of section 35.
- A copy of audited annual accounts and a reconciliation statement are to be furnished along with annual return as specified under sub-section (2) of Section 44.
- Annual return is to be furnished on or before the thirty-first day of December following the end of such financial year in accordance with the provisions of sub-section (1) of section 44.
- Therefore, accounts shall get audited on or before the thirty-first day of December following the end of such financial year.
- The Commissioner or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for one or more than one financial year, at the place of business of the registered person or in their office.
- The registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit by issuing a notice in FORM GST ADT-01.
- The audit shall be completed within a period of three months from the date of commencement of the audit.
- "commencement of audit" shall mean the date on which the records and other documents, called for by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later.
- Further, where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months.
- Audit to be conducted to verify, the documents on the basis of which the books of account are maintained and the returns and statements furnished under the provisions of the Act and the rules made thereunder, and the correctness of the turnover, exemptions and deductions claimed, the rate of tax applied in respect of the supply of goods or services or both, the input tax credit availed and utilised, refund claimed, and other relevant issues and record the observations in his audit notes.
- During the course of audit, the authorised officer may require the registered person,— to afford him the necessary facility to verify the books of account or other documents as he may require; and to furnish such information as he may require and render assistance for timely completion of the audit.
- The proper officer may inform the registered person of the discrepancies noticed, if any, as observed in the audit and the said person may file his reply and the proper officer shall finalise the findings of the audit after due consideration of the reply furnished.
- On conclusion of audit, the proper officer shall, within thirty days, inform the registered person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings in FORM GST ADT-02
- Where the audit conducted results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74.
- If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits,he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing in FORM GST ADT-03 to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner.
- The chartered accountant or cost accountant so nominated shall, within the period of ninety days, submit a report of such audit duly signed and certified by him to the said Assistant Commissioner.
- Further, the Assistant Commissioner may, on an application made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, extend the said period by a further period of ninety days.
- On direction, special audit to be conducted notwithstanding that the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.
- The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of special audit which is proposed to be used in any proceedings against him under this Act or the rules made thereunder.
- The expenses of the examination and audit of records, including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determination shall be final.
- On conclusion of the special audit, the registered person shall be informed of the findings of the special audit in FORM GST ADT-04.
- Where the special audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74.
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