Are you curious to know what is GST audit? You have come to the right place as I am going to tell you everything about GST audit in a very simple explanation. Without further discussion let’s begin to know what is GST audit?
GST or Goods and Services Tax is a value-added tax levied on the sale of goods and services in India. It is a comprehensive indirect tax that has replaced various other taxes like VAT, excise duty, and service tax. GST audit is an important process that businesses are required to undergo to ensure compliance with GST regulations.
In this blog post, we will discuss what a GST audit is, its objectives, and the process of conducting a GST audit.
What Is GST Audit?
GST audit is a process of verifying the accuracy and completeness of the GST returns filed by businesses. It is conducted by a qualified chartered accountant or cost accountant who has been appointed by the taxpayer. The objective of a GST audit is to ensure that the GST returns filed by the business are accurate and comply with the GST regulations.
The GST audit is conducted in accordance with the provisions of the GST Act and the GST Rules. The auditor is required to verify the accuracy of the GST returns filed by the business and ensure that all transactions have been correctly classified and reported.
Objectives Of GST Audit
The primary objectives of a GST audit are as follows:
- To verify the accuracy and completeness of the GST returns filed by the business.
- To ensure that the business has complied with all the provisions of the GST Act and the GST Rules.
- To identify any errors or discrepancies in the GST returns filed by the business.
- To assess the level of compliance of the business with the GST regulations.
- To provide recommendations for improving the GST compliance process of the business.
Process Of Conducting A GST Audit
The process of conducting a GST audit involves the following steps:
- Appointment of the Auditor: The business is required to appoint a qualified chartered accountant or cost accountant to conduct the GST audit.
- Preparation of Audit Plan: The auditor prepares an audit plan which includes the scope and objectives of the audit, the audit methodology, and the audit schedule.
- Conducting the Audit: The auditor reviews the books of accounts and other relevant documents to verify the accuracy and completeness of the GST returns filed by the business.
- Preparation of Audit Report: Based on the findings of the audit, the auditor prepares an audit report which includes the observations, findings, and recommendations.
- Submission of Audit Report: The audit report is submitted to the business, and the business is required to take corrective actions, if any, based on the recommendations of the auditor.
In conclusion, GST audit is an important process that businesses are required to undergo to ensure compliance with GST regulations. The primary objectives of a GST audit are to verify the accuracy and completeness of the GST returns filed by the business, ensure compliance with the GST Act and the GST Rules, and provide recommendations for improving the GST compliance process of the business. The process of conducting a GST audit involves appointing an auditor, preparing an audit plan, conducting the audit, preparing an audit report, and submitting the report to the business.
Is GST Audit Mandatory?
Taxpayers, whose annual turnover is more than Rs. 2 crores in a financial year, are required to get audited by CA every year, under Section 35(5) of the CGST Act.
Who Is Required To Have a GST Audit?
Mandatory GST AUDIT by professionals
If the annual turnover of a registered taxpayer is more than Rs. 5 crore in a financial year, he is required to get his accounts audited every year. Business with an annual turnover of More than Rs 5 crore, filing of GSTR-9C.
What Are The Types Of GST Audits?
The GST law provides for several types of audits, including:
- Departmental Audit/Audit by Tax Authorities: This is a routine audit that is conducted on a regular basis by the tax authorities.
- Statutory Audit:
- Special Audit:
What Are The Benefits Of GST Audit?
It also ensures the accuracy of the reported turnover, taxes charged, rebate received, and input tax credit used, as well as the determination of all such compliances under the GST Act to be reviewed by an authorised professional.
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