Before moving straight towards the GST audit checklist, we need to know the type of audits under GST:
1) Turnover based audit
This type of GST audit takes place when the aggregate turnover of the taxpayer exceeds the 2 Crore INR mark. The taxpayer needs to appoint a CA or CWA for a turnover based audit.
2) General audit
This type of GST audit takes place when the order is passed by the GST Commissioner, however, the taxpayer gets a minimum 15 days prior notice for such audit. A general audit is done either by CGST/SGST Commissioner or any other person authorized by the GST Commissioner.
3) Special audit
This type of GST audit takes place when the order is passed by the deputy or assistant commissioner, however, such officers need to take prior approval of the GST Commissioner. To perform a special audit the GST commissioner can appoint CA or CWA as may be required.
GST Audit Checklist
Here is the GST audit checklist:
1) Cross verifying GSTR 3B with GSTR 1 & GSTR 2A
There two important things that will get covered under this point
a) Accurate ITC
In some cases, it is found that the taxpayers try to manipulate the figures and take excess Input Tax Credit (ITC). So, the taxpayer needs to reconcile the GSTR 3B with GSTR 2A to ensure that the taxpayer is not claiming excess Input Tax Credit (ITC). In case if the taxpayer has claimed any ITC in excess than he or she needs to pay interest and penalty as may be prescribed.
b) Amendment in GSTR:
In case if the GST auditor finds any mismatch between the GSTR 3B and GSTR 2A then in such a case the auditor needs to direct the management to amend the invoices at summary levels in GSTR 1 by filing GSTR-1A.
2) Checking the format of invoice
Format of invoices plays a very crucial part in GST and that is why there are specific GST rules for the same too. In case if the invoice format varies, the GST auditor can advise the management to amend the invoice structure or format as may be prescribed. There are many incidents where the taxpayer was using different invoices structure. So, keeping this in mind the Government has introduced e-Invoicing where the invoice schema will remain the same throughout.
3) Input Tax Credit (ITC) reversal for non-payment within 180 days
At the time of auditing, the taxpayer shall keep the following condition in mind to reverse ITC for non-payment:
a) The period between the invoice date and payment date shall not exceed 180 days.
4) Reconciling e-Way Bills with invoices
As we already know under GST Regime, the taxpayer can move goods from one place to another only after generating an e-way bill. So by reconciling the e-Way Bills data with invoices, the auditor can determine if there is any bogus entry made in the records by the taxpayer.
However, there are instances where the goods are transported in non-motorized vehicles. In such cases, the generation of the e-way bill is not required. Hence, the auditor needs to closely scrutinize all the invoice level data too.