What is GST AUDIT ? DO AUTHORITY CHECK ALL TRACTION MANUALLY?

[Dinesh kumar]

Who is liable to get their accounts audited under GST?

Which documents and records are required during a GST audit?

What are the consequences of non-compliance or discrepancies found in a GST audit?

What are the difference among GSTR 3B, 9 and 9C?

[Sadanand Bulbule]

What is GST Audit?

A GST Audit means the examination of records, returns and documents maintained by a registered person to verify correctness of turnover declared, taxes paid, refund claimed and ITC availed, and also to check compliance with GST law.

There are two types:

•Departmental Audit (Sec 65): Conducted by GST authorities for any taxpayer. Special Audit (Sec 66): Ordered when the case is complex, conducted by a CA/CMA nominated by the department.

Do Authorities Check All Transactions Manually? No, not all transactions are checked manually. The department mainly relies on data analytics (e.g. GSTR-1 vs GSTR-3B mismatches, ITC claimed vs GSTR-2A/2B, e-way bill data vs turnover). Only in case of discrepancies or high-risk cases will detailed examination of books and invoices be done.

Who is Liable? Earlier, taxpayers with turnover above Rs. 2 crore had to get accounts audited and file GSTR-9C. From FY 2020–21 onwards, this requirement has been removed. However, departmental or special audits can still be conducted for any taxpayer irrespective of turnover.

Documents Required in Audit : GST returns (GSTR-1, GSTR-3B, GSTR-9, GSTR-9C if applicable earlier). Books of accounts, invoices, debit/credit notes, e-way bills

• ITC and outward supply reconciliation statements.

Consequences of Non-Compliance

• Demand of tax with interest & penalty. Recovery proceedings under Sec 73/74. In fraud cases, even prosecution.

Difference Between GSTR-3B, 9, and 9C.

GSTR-3B ? Monthly/Quarterly summary return with liability & ITC.

GSTR-9 ? Annual return consolidating entire year’s data.

GSTR-9C ? Audit reconciliation statement (earlier mandatory > Rs. 2 crore turnover; waived from FY 2020–21).

By the way, may I know your profile plz?

Are you a taxman, taxpayer, tax consultant or tax academician?

[Dinesh kumar]

Thanks sir Ji,  I am new joinee(G-B) in CBIC. 

[Sadanand Bulbule]

Excellent. As guessed by me, you are a keen learner. Being in CBIC, you can enrich this forum to new heights. 

[Shilpi Jain]

There is a certification course in GST that is available. There are also a lot of seminars / webinars that are generally conducted for GST. Attending these could speed up your knowledge gaining quest.

AI Summary

GST audit procedures: data-driven selection and statutory audits can trigger detailed book scrutiny and tax demands. GST Audit examines records, returns and documents to verify turnover, tax, refund claims and ITC. Two modes exist: Departmental Audit under Section 65 and Special Audit under Section 66 by a nominated CA/CMA. Selection is largely data driven using return mismatches, ITC vs auto populated records and e way bill reconciliation; only high risk or discrepant cases undergo detailed book and invoice scrutiny. The earlier turnover threshold for mandatory audit reconciliation (GSTR 9C) was removed from FY 2020 21, but audits can still be initiated for any taxpayer.