GST is a trust-based taxation system in which the applicant is allowed to self-assess his tax responsibility and charges the same for himself, without any interference by the tax authorities. To guarantee that the self-assessed GST returns are not misappropriated, the government has in place a rigorous audit process to test and verify that the taxpayer complies with the requirements of the GST statute. If, within the financial year, the revenue touches Rs. 2 Crores, the taxpayer is expected to get his records audited by a Chartered Accountant or Cost Accountant. They are expected to include a copy of the annual reports and accounts and a properly certified summary document in Form GSTR 9C on or before 31 December. The GST audit limit is the same for all taxpayers registered, i.e. no distinct GST audit limit is set for special category states or union territories.
The 2017 GST Act allows for three forms of Audit.
The chartered accountant or tax accountant audit GST:
Section 35(5) of CGST Act, 2017, the first examination shall be performed by a cost accountant or a chartered accountant. Each enrolled individual whose gross revenue exceeds two crore rupees within a financial year shall have his or her reports audited by a CA and include a copy of the audited annual reports and a properly certified reconciliation statement in FORM GSTR-9C.
GST Departmental Audit:
Section 65(1) of the CGST Act, 2017, the second form is the regular audit, the GST law gives the audit authority to the Commissioner or to any officer allowed by him/her to conduct the audit of any registered individual at such frequency and in such a manner as may be required for that time.
The third form of audit, Section 66(1) of the CGST Act, 2017, is named the Special Audit. In Special Audit, the licensed individual could be required to have his documents checked and audited at any point of inspection, examination, prosecution, or other litigation, like account books, by a chartered accountant or expense accountant; depending on the nature of the situation.
The list provided above is not inclusive, so it is also important to record all other documents that are required or appear essential.
The purpose of GST audit documentation are as follows:
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