GST on audit fees

[pawan agrawal]

if we are doing tax audit of account of 2016-17 in aug 2017. can we give bill of audit after charging gst on audit bill. if yes then how will client show gst on audit fees in his account. Because audit provision has to be made in march 2017 balance sheet. then can he made audit provision with gst in march 2017 balance sheet. will he received input credit of GST on audit bill and how...

[Himansu Sekhar]

You will give gst bill as the provision of service is during the gst period. They will take the credit .

[Himansu Sekhar]

You will upload the gstr1 mentioning their gstin which will be shown in gstr2a form and after verification will be reflected in credit ledger.

[pawan agrawal]

sir problem is how will show client audit fees with gst in his books of account. could he show audit fee with gst in their march 2017 bs. example audit fees 20000+ gst 3600. in march bs whether he will show 20000 or 23600.

[Himansu Sekhar]

Balance sheet will show amount plus tax. No problem if you will show gst. But I will reply you tomorrow.

[Rajagopalan Ranganathan]

Sir,

Prior to 1.7.2017, service tax was leviable on audit services. Therefore GST can be shown in the same way how service tax paid for such service was shown. If the bill for audit is raised after introduction of GST then you have to charge GST only.

According to Section 13 (2) of CGST Act, 2017 "the time of supply of services shall be the earliest of the following dates, namely:-

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

(b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

(c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply:

According to rule 47 of CGST Rules, 2017 "the invoice referred to in rule 46, in the case of the taxable supply of services, shall be issued within a period of thirty days from the date of the supply of service.

[Himansu Sekhar]

Create a provision for the audit fee and 15% Stax amount. Show it in the financial record as liability. Actual expenses will be adjusted in the current year.

AI Summary

GST on audit fees: invoice issued post-GST attracts tax; recipient may claim input credit and record tax in books.
Where an audit for a prior period is billed after GST commencement, GST must be charged on the audit invoice; time of supply is determined by the earliest of invoice issuance, provision of service, or the recipient recording the service. The supplier should report the invoice in GSTR 1 so it flows to the recipient's GSTR 2A and credit ledger. The recipient may claim input tax credit for GST on audit services and may show a provision in the balance sheet inclusive of the tax component, with actual adjustment on payment.