GST audit checklist

GST audit checklist:

1. Threshold Limit
2. GST Audit Checklist
3. Consequences of Non-Compliances
4. Other Provisions

• Every registered taxable person whose Aggregateturnover* during a financial year exceeds the prescribed limit [as per the latest GST Rules, the turnover limit is above Rs 2 crore] shall get his accounts audited by a chartered accountant or a cost accountant. He shall electronically file:

1. Annual Return-Form GSTR-9 by 31^st December of the next financial year.
2. Copy of audited annual accounts.
3. Reconciliation form GSTR-9C.

• Aggregate turnover-

Aggregate value of all taxable supplies (excluding Reverse Charge) 

PLUS ExemptSupplies PLUS Export of Goods/ Service PLUS Interstate Supplies (excluding any CGST, SGST, IGST & Cess) on ONE PAN Number

• The following are the mandatory GST Audit checklist that requires strict compliance:

1. Checking of GSTR 3B in relation to GSTR 1 & GSTR 2A.

Two important points get covered under this heading:

                 i). Interest and penalties in GST Act:

• Auditors need to reconcile the GSTR 3B with GSTR 2A to make sure that the organization              would not claim extra tax credit.

                ii). Amendment in GSTR:

• Data gaps between GSTR 3B and GSTR-2A, auditor would recommend the management to make amendment of the invoices at summary levels in GSTR 1. 

        2. Checking particulars of invoice:

• Invoice format & details should be maintained as per prescribed under GST rules.

       3. Reversal of input tax credit for non-payment in 180 days:

                GST auditor has to check the following details:

1. Difference between invoice date and date of payment, this would NOT exceed 180 days. 
2. The amount of payment needs to remain equal with invoice amount and GST.
   1. If the payment amount is less than invoice amount plus GST, the input tax credit to the extent of short payment would get reversed.

        4. Reviewing e-way bill and matching with invoices:

1. Results of any mismatch shown in the e-way bill in relation to invoice.

• An e-way bill is not alterable and it is not possible to delete it but it is permissible for cancellation within 24 hours of its generation. When the goods get shifted without e way bill, the designated authority could impose fine for this.

        b.  Movement of goods in non-motorized vehicles:

• Whenever transportation takes place in non-motorized vehicles, the necessity of issuing e-way bill does not arise.  As some businesses are taking to this practice in order to avoid the e-way bills, internal auditors need to    closely scrutinize the e-way bill is more worth more than fifty thousand rupees (Rs.50,000/-).

        5. Stock pending with job-workers:

            Goods & capital goods lying with job workers need to get received within a period of 1 year & 2 Year respectively. A registered person required to file Form ITC-04 on quarterly basis.

        6. Consequences of Non-Compliances

The penalty can be up to amount Rs. 10,000/- or the amount of tax evaded whichever is greater for the following offences:

1. Failing to deduct the tax required or deducts a lower amount of TDS or fails to deposit the tax to the government.
2. Failing to collect tax or does not collect sufficient amount of tax as required from the supplier or fails to pay the tax collected to the government.
3. Supply of goods and services is carried without giving appropriate invoice or providing incorrect invoice.
4. Not obtaining registration whenever required and declaring incorrect / false information at the time of registration.
5. Tax refund claimed through incorrect or fraud practices.
6. Analysis of Particulars of Invoice Documents

1. Tax invoice contains all the particulars as prescribed rule 46(b) of the CGST Rule, 2017.
2. HSN Code has been mentioned in the tax invoice

• Verification of time of issuance of tax invoice:

• Supply of Goods:

• On or before the date of removal, in the case of actual movement of goods.
• GST is payable on a reverse charge basis, on receipt of such goods.

• Supply of Services:

• Normally = within a period of 30 days from the date of supply of service.
• Continuous Supply = (Certain due date) -Within 30 days from the due date.
• Continuous Supply = (Un-Certain due date) -Within 30 days from the date of actual payment.

• Banking & Other Financial Institutions:

• The due date will be 45 days.