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Audit Under GST: Procedure & Assessment

Prakash Matre
Prakash Matre at September 23, 2023

What is Audit Under GST

Explain Audit under GST and GST audit meaning is inspection of returns, records and other documents furnished by the taxpayer. GST Audit is carried out to check whether the turnover, taxes paid, ITC refund claimed and ITC availed mentioned in his annual report are true and fair or not. Moreover, a GST audit also helps in evaluating whether the taxpayer is compliant with the GST provisions.

Next will know what is GST audit, types of audit in GST, GST audit eligibility, GST audit applicability and much more.

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 GST auditing 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). *Aggregate Turnover under GST is calculated as follows: Value of all taxable supplies whether inter-state or intra-state + exempt supplies + supplies made outside India (export supply)

Types of Audit Under GST

There are three types of GST audit and under GST the third type of audit is called Special Audit:

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 GST commissioner Chartered Accountant (CA) or Cost and Work Accountant (CWA) appointed by the commissioner.



Appointment of GST Auditor

At the beginning of the financial year, the proprietor in case of sole-proprietor, a partner in case of LLP or Partnership Firm and the Board of Directors (BOD) in a case of a company can appoint the GST auditor. 

Accounts That Need To Be Audited By The GST Auditor

Here is the list of documents that need to be audited by the GST auditor:

  1. Register of Sales
  2. Register of purchase
  3. Register of Stock
  4. Expenses ledgers
  5. Input tax credit (ITC) claimed and utilized
  6. GST payable and paid
  7. All the e-Way bills generated
  8. Any other document or record as may be necessary for that relevant period.

Comments by GST Auditor

In case if the auditor finds any mismatch in the accounts or records, the GST auditor shall add a comment on such a mismatch in the audit report. Moreover, the taxpayer can reconcile such a mismatch reported by the auditor in the C-03 Form.

Submission of GST Audit report

After GSTR-9C gets audited by the CA or CWA, the following things shall be reported by him or her:

  1. Whether the proper records of transactions are maintained.
  2. Whether the Financial Statements are prepared as per the books of accounts.
  3. To certify the authenticity of the information in GSTR-9C.
  4. To mention any other observation or to add any comment thereof

What Is The Penalty For Not Submitting the GST Audit Report?

Under GST, there is no such specific penalty for not submitting the GST Audit Report. Hence, the general provisions of the penalty will be applicable that may amount up to 25,000 INR.

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