GST audit includes checking accounts, receipts, and other documentation kept by an individual registered with GST. It also guarantees the accuracy of the reported turnover, the taxes charged, the rebate received, the input tax credit used, and the determination of all such compliances to be reviewed by an authorised professional under the GST Act.
GST is a trust-based taxation system that allows an individual to self-assess their tax obligation, pay taxes, and file reports. Therefore, a reliable evaluation or a GST audit process is a must to ensure that the taxpayer has properly calculated his tax liability. The government is taking various measures to properly implement GST, and auditing is one among them.
The following are the required checklists for the GST Audit which involve strict compliance:
GSTR 3B regulations in support of GSTR 1 & GSTR 2A:
Under this, there are two significant points:
Under this, the receiver may demand additional input tax credit. So for this, he/she is obligated to make an interest payment at 24 percent. This refers to the sum of the sales tax. The auditors must match the GSTR 3B with GSTR 2A to ensure that the company will not assert any extra tax credit. Whether it was charged in excess, inflation and the tax payment will be incurred by the corporation on the date applied. As the GST authorities are informed of the data discrepancies between GSTR 3B and GSTR 2A, taxpayers may have to pay both the interest amount and the penalty.
Once the auditor is conscious of the data discrepancies he/she must suggest that the managers make a summary level adjustment of the invoices in GSTR 1.
Checks invoice details:
It is quite obvious that strict guidelines are in effect for the details of the invoices. If the invoice style changes, he will urge the management to create an invoice modification to provide the specifications of the GST regulations.
Input tax credit for failure to pay in 180 days is reversed:
The GST auditor has to find out the following information at this stage:
Reviewing e-way bills and invoice matching:
This stage is composed of three steps, such as:
If the movement happens in non-motorized cars, there is no need to file the e-way request. Since certain companies are taking this method to stop e-way bills, the audit committee needs to investigate the e-way bill which is over Rs.50,000 worth.
Cross-checking the pending stock of staff on June 30, 2017:
Goods that are with workers on 30th April 2020 will be obtained within one year. Capital goods residing with staff will be returned by August 30, 2022, which is within a two-year period.
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