GST Audit

Recheck the accuracy.

Get the assessment of records relating to turnover and return.


Assessment. Improvement.

  • Correct Time of Supply can be known, so that taxes are never prepaid (i.e. paid before it is due) or post-paid (i.e. paid later than it was due) and thus paid on time. This also results in saving of interest cost (both on pre-payment and post-payment) and penalties (in case of post-payment). For eg: tax liability on advance receipts from Customers,etc.
  • Correct Place of Supply so that the respective taxes are correctly collected and paid (IGST, CGST, SGST) because wrong but full payment of taxes is no excuse and the taxes under the respective supplies have to paid correctly. For eg: A marketing consultant providing technical sales service to a Foreign Company in respect of sales to be done in India – is an intra-state supply (since the recipient of service is Outside India and therefore the Supplier’s place of business is taken as place of supply).
  • Taxes are charged and paid on the goods & services @ correct gst rates since the year has witnessed many revision in tax rates of various goods.
  • Any tax over-collected has to be paid to the Government since it will result in profiteering, and thus huge penalties. Similarly, any under-collection of tax has to be paid out of pocket of the supplier/seller.
  • HSN Codes for the goods and services have been correctly ascertained and filed in the GSTR 1 return.
  • Books of Accounts have been maintained as per the manner laid down under the ACT.
  • Invoices have been raised correctly (i.e. with complete information as is necessary).
  • Matching of GST Returns with the Books of Accounts.
  • Matching of GST Electronic Credit & Cash ledger with the Credit reflected in the books.
  • Finding out any unclaimed GST Input Tax Credit. Eg: on bank charges, sundry expenses bills like printing & stationery,etc.
  • Recording of Fixed Assests purchased on Taxable Value and availing the required GST Input Tax Credit so that GST ITC can be availed correctly and fully and also depreciation be calculated on the taxable value.
  • Claiming of correct refunds for the Exporters, for the tax paid on inputs.
  • Reversing of any ITC that was wrongly claimed or was liable to be reversed.
  • Tax to be paid under Reverse Charge for few particular services.


As prescribed under the rules.

  • Reconciliation of turnover, ITC & Tax paid
  • Review of Accounts/GST Return
  • Classification of Supply
  • Compliance of Reverse Charge Mechanism (RCM)
  • Review of amount booked under head “other income”
  • Admissibility of Input Tax Credit
  • Review of Creditors outstanding for more than 180 days
  • Review of Sale/disposal of business assets
  • Review of transactions not forming part of annual accounts

Documents required

Statements, returns etc.

  • Offer letter which includes the scope and objectives of auditor and management.
  • Engagement and appointment letter.
  • Audit plan and Audit programme.
  • Detailed audit checklist for GST audit or GSTR 9C.
  • Copies of invoices, agreements, etc.
  • Copy of written representation letters obtained from management.
  • Copy of GST return, details of tax paid and credit availed, sales made etc.
  • The important matters that are identified during the audit and deficiencies in internal controls which are communicated to management.
  • The risk assessment procedure applied for areas of high risk and areas of low risk is to be noted.
  • Sufficient and appropriate audit evidence obtained during the audit.
  • All working papers in the electronic form such as Excel, CSV, PDF, JPEG, JSON etc.

Why LawDocs?

A good service.

  • Vast experience in the domain.
  • Identification of loopholes and weak points.
  • Proper assessment as per statutory rules
  • Legal and financial experts available for guidance.


Audit under GST involves examination of records, returns and other documents maintained by a GST registered person. It also ensures correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and assess other such compliances under GST Act to be checked by an authorized expert.

GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes and file returns. Thus, to ensure whether the taxpayer has correctly self -assessed his tax liability a robust audit mechanism is a must. Various measures are taken by the government for proper implementation of GST and audit is one amongst them.

If the annual turnover of a registered taxpayer is more than Rs. 2 crores in a financial year , he is required to get his accounts audited by a Chartered Accountant or Cost Accountant every year.

Aggregate turnover = Value of all taxable (inter-state /intra-state) supplies + exempt supplies + export supplies of all goods and services

Total turnover calculation must be PAN-based, which means once the turnover under the PAN is more than Rs. 2 crores all business entities registered under GST for that PAN will be liable for GST audit for a financial year.

Only a Chartered Accountant or a Cost Accountant can perform a GST Audit u/s 35.

  • Sales Register
  • Purchase Register and Expenses ledgers
  • Output tax payable and paid
  • Input tax credit availed and utilized
  • E-way bills generated during the period under Audit, if in compliance with rules.
  • Stock Register
  • Any documents that record communications from the GST department relating to the year.

The finalized GSTR-9C can be certified by  the CA who conducted the GST audit or it can also be certified by other CA who did not conduct GST Audit for that particular GSTIN.

The following must be reported and certified by the GST Auditor or the certifier:

  • Whether or not the Financial Statements are prepared as per the books of accounts maintained at the additional place of business or principal place of business  of the taxpayer.
  • Whether or not all the requisite accounts or records are maintained.
  • Certify the accuracy of information in GSTR-9C.
  • To list down the audit observations / reservations / comments, if any.
  • Annual return in form GSTR-9 (for every GSTIN)
  • Audited financial statements (which is PAN-based)
  • Certified the reconciliation statement in Form GSTR-9C, reflecting reconciled values of supplies , tax amounts declared in GSTR-9 compared to audited financials in Part-A, along with the Audit report in Part-B.

Only a Chartered Accountant or a Cost Accountant can perform a GST Audit u/s 35.

Points to Note:

  • An internal auditor cannot parallelly be appointed as a GST Auditor.
  • The GST Act does not allow a GST practitioner to perform the audit. The power to audit is granted only to a Chartered Accountant or Cost Accountant who is in practice or is an employee of a firm of Chartered Accountants or Cost Accountants. Therefore, a Chartered Accountant must not be registered as a GST practitioner for the purpose of issuing the Audit Report.
  • Where an organization or an entity has multiple branches registered under GST in different states/UTs, the total aggregate turnover of all such branches is considered while calculating the threshold limit of Rs. 2 crores.So, if the cumulative turnover of all the branches exceeds Rs. 2 crores, then the GST audit is applicable to each of these branches, irrespective of whether the turnover of a particular branch is less than the threshold.In such cases, one can appoint either one dedicated auditor for all branches or separate auditor for each branch. Where multiple branches have different auditors, the Standards on Auditing: SA 299 — Responsibility of the Joint Auditors may apply for the purpose of reporting GST Audit observations & Reporting.
  • All taxable (inter-state and intra-state) supplies other than supplies on which reverse charge is applicable
  • Supplies between separate business verticals.
  • Goods supplied to/received from job worker on principal to principal basis.
  • Value of all export/zero-rated supplies.
  • Supplies of agents/ job worker on behalf of the principal.
  • All exempt supplies. E.g. Agricultural produce supplied along with branded ready-to-eat food.
  • All taxes other than those covered under GST Eg: Entertainment Tax paid on the sale of movie tickets.
  • Inward supplies on which tax is paid under reverse charge.
  • All taxes and cess charged under Goods and Service Tax like CGST, SGST or IGST, Compensation Cess.
  • Goods supplied to or received back from a Job Worker.
  • Activities which are neither supply of goods nor service under schedule III of CGST Act.
  • Whether or not all the requisite accounts or records are maintained.
  • Whether or not the Financial Statements are prepared as per the books of accounts maintained at the principal place of business or additional place of business of the taxpayer.
  • Certify the accuracy of information in GSTR-9C.
  • To list down the audit observations or reservations or comments, if any.
  • To prove that the audit was planned and performed in accordance with the standards of auditing.
  • To assist the engagement team in planning and performing the GST audit effectively.
  • To act as the evidence for the auditors to confirm that the overall objectives set by the auditors are satisfied.
  • To facilitate the engagement team to be accountable and responsible for work.
  • To enable reporting partner to ensure all planned work has been completed adequately.
  • To assist in planning and control future audits.
  • To encourage a methodical approach.
  • To enable external inspections, reviews in accordance with pertinent legal, regulatory or other requirements.
  • To preserve the records of matters which are significant for the continuance of future audits.

The objective of GST audit is “to verify” means to prove the accuracy/correctness of whether registered person has correctly:

  • declared his turnover
  • assessed his liability & paid taxes thereon
  • claimed eligible Input Tax Credit
  • claimed the refund, if any
  • maintained accounts and records/documents
  • filed his return as per the provisions of the law
  • complied with all the provisions of the law, rules and Notifications
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