The due date for filing GSTR-9 and GSTR-9C forms is December 31.
The Finance Act, 2021 brought significant changes to GST audit requirements, particularly impacting businesses with higher turnovers. While previously, taxpayers with an annual turnover of Rs. 2 crores or more had to submit GSTR-9C certified by a Chartered Accountant (CA) or Cost Accountant (CMA), this mandate was lifted, shifting to self-certification for turnovers above Rs. 5 crore, as confirmed by the 43rd GST Council meeting in May 2021. These updates were later notified by CBIC in Notification No. 29/2021 – Central Tax, dated 30th July 2021. Let’s explore the GST audit process and its various types, providing clarity for businesses navigating these regulations.
A GST audit entails a thorough examination of financial records, returns, and other documentation maintained by a GST-registered taxpayer. The purpose is to verify the accuracy of reported turnover, tax payments, refunds claimed, and input tax credit availed, ensuring compliance with the GST Act. As GST is a self-assessed tax system, a well-structured audit mechanism serves as a crucial check to verify the taxpayer’s self-assessed tax liability.
GST audits fall into three main categories:
Turnover-Based Audit:
General Audit:
Special Audit:
Under Section 35(5) of the CGST Act, businesses with an annual turnover exceeding Rs. 2 crore must have their accounts audited by a Chartered Accountant or Cost Accountant. This turnover is calculated on a PAN basis, covering the aggregate value of all taxable, exempt, and export supplies, excluding certain elements like reverse charge supplies. For businesses with multiple GST registrations across states, the cumulative turnover across all branches under a single PAN is considered.
Key Elements in Aggregate Turnover Calculation:
Only Chartered Accountants or Cost Accountants are authorized to perform GST audits. Notably, an internal auditor of a company cannot serve as its GST auditor, and GST practitioners are not permitted to conduct GST audits. If an organization operates multiple branches across states, the aggregate turnover across these branches determines GST audit applicability, regardless of individual branch turnover.
To conduct a comprehensive GST audit, an auditor reviews critical records, including:
The auditor also verifies communications with the GST department and reconciles the values in GSTR-9 with audited financials.
For taxpayers above the specified turnover threshold, GSTR-9C must accompany the annual return (GSTR-9). Although GSTR-9C self-certification is permitted for turnovers above Rs. 5 crore post-2021, it still plays an important role in ensuring compliance.
Filing Requirements:
The GSTR-9 and GSTR-9C forms are generally due by 31st December of the subsequent financial year. However, this deadline may be extended by CBIC notification as needed.
Navigating GST audit requirements, especially for businesses with turnovers exceeding Rs. 2 crore, requires understanding the latest regulations and staying compliant with statutory obligations. By familiarizing yourself with the GST audit process and compliance requirements, businesses can avoid penalties and ensure accuracy in their GST filings.
For more detailed guidance, consult Certicom Group’s expert team, experienced in helping businesses manage GST audits and related financial requirements efficiently
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