GST is a trust-based taxation system where the applicant can independently determine his tax liability and pay it without interference from the tax authorities.
The government has established a rigorous audit mechanism to test and confirm that the taxpayer complies with the requirements of the GST Act to ensure that the self-assessed GST returns are not misappropriated.
If, within the financial year, the revenue touches ₹ 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, that is. no distinct GST audit limit is set for special category states or union territories.
The 2017 GST Act allows for three forms of Audit.
According to Section 35(5) of the CGST Act of 2017, a cost accountant or a chartered accountant must conduct the initial examination. A copy of the audited yearly reports and a fully certified reconciliation statement must be included in Form GSTR-9C for each enrolled person whose gross revenue exceeds two crore rupees in a fiscal year.
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 Special Audit is the third type of audit, according to Section 66(1) of the CGST Act, 2017. Depending on the circumstances, a licensed individual may be compelled to have his documentation, such as account books, verified and audited by a chartered accountant or expense accountant at any point of inspection, examination, prosecution, or other litigation.
The list above is not inclusive, so it is important to record all other required or essential documents.
Regarding legal services, Vakilsearch is the go-to platform for many customers. Vakilsearch has done many GST audits for big businesses and individuals. Vakilsearch caters to each customer's needs during registration. Vakilsearch has a handful of legal experts who guide you in every step, which makes it less stressful when you want to start with the audit process.