Checklist for GST Audit for FY 2022-23:

Like other audits, GST audit is the process of verifying records, returns and other related documents maintained by registered persons under the GST act. The purpose to conduct a GST audit is to examine the correctness of turnover declared, taxes paid, refund  & input tax credit (ITC) claimed and to verify that GST compliances are met properly. GST audit checklist is need for professional to cover all points during audit and reduce future legal notice demands.

According to section 35 of CGST Act, every registered person under GST whose aggregate turnover exceeds Rs. 5 (five) crore in the financial year is liable for GST audit. Registered person is required to file electronically through GST common portal along with annual return (GSTR-9)  audited annual accounts and a reconciliation statement duly certified  in Form GSTR-9C. Turnover limit for compulsory filing of GSTR 9 is Rs.2 crore whereas for GSTR 9C is RS.5 crore. In This article we will discuss checklist for GST audit.

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Applicability & turnover limit for GST audit for FY 2022-23:

According to section 35 of CGST Act, every registered person under GST whose aggregate turnover exceeds Rs. 5 (five) crore in the financial year is liable for GST audit. Registered person is required to file electronically through GST common portal along with annual return (GSTR-9)  audited annual accounts and a reconciliation statement duly certified  in Form GSTR-9C. Turnover limit for compulsory filing of GSTR 9 is Rs.2 crore whereas for GSTR 9C is RS.5 crore.

For summarizing the applicability of GST FY 2022-23

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Checklist for Basic Documentation to collect for GST Audit

For Conducting GST audit its important to have necessary documents for verification of ITC credit  , eligibility , RCM applicability , reconciliation etc. hence at time of GST audit ask for below documents to company.

[icon type=”icon-direction” color=””]Sale invoice , credit notes , Debit notes

[icon type=”icon-direction” color=””]All GSTR 3B , GSTR 1 returns

[icon type=”icon-direction” color=””]Working Prepared for GST returns

[icon type=”icon-direction” color=””]Financial statements

[icon type=”icon-direction” color=””]Tax Audit report if any

[icon type=”icon-direction” color=””]Purchase invoices

[icon type=”icon-direction” color=””]GST site id and password

[icon type=”icon-direction” color=””]GST Refund working

[icon type=”icon-direction” color=””]Any Notice during year

[icon type=”icon-direction” color=””]Copies of Eway Bill

[icon type=”icon-direction” color=””]Sales Register

[icon type=”icon-direction” color=””]Purchase Register

[icon type=”icon-direction” color=””]Delivery challans

[icon type=”icon-direction” color=””]self-invoice is issued for RCM Payments

[icon type=”icon-direction” color=””]Documents related to job worker

[icon type=”icon-direction” color=””]GSTR 2B Report

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Checklist for GST Audit  for FY 2022-23:

While conducting the GST audit, the auidtor will check sales register, stocks register, purchase register, tax credit & ITC claimed, output tax, communication from department, orders, etc. Audit checklist gives directions to auditors on how to perform audit and procedure.Following are some checklist points that are to be kept in mind while performing audit:

Understand business: GST rates and returns applicable are prescribed on basis of nature and type of business. So, it becomes necessary to have good understanding of business. Check registration certificate, GST advance ruling if obtained, previous financial statemnts, returns,etc.

Classification and Valuation: Review policy adopted by entity to classsify and value gods/services. See whetherspecial transactions like free samples, advance received against goods, transactions with agent/broker, etc. are recorded as per regulations.

Reconciliation of GSTR 3B,GSTR 1 & GSTR 2A: Forms GSTR 9 & 9C should be filed only after reconciliation of 3B, 1, 2A and books maintained by taxpayers. Sometimes taxpayers try to claim extra ITC by manipulating figures so it is important to reconcile 3B with 2A.

Checking invoice format of invoice: Format of invoice plays an important role in GST and hence it needs to be followed very specifically. If any alterations are required, the auditor should advise the management about the same.

E-way bill requirements: E-way bill is one of the statutory requirements of the GST act. It is the responsibility of the auditor to verify e-way bills tally with invoices issued. Auditors should also check e-way bills are prepared for all consignments wherever applicable.

Reversal of ITC: According to provisions, non-payment of an invoice within 180 days requires the taxpayer to reverse the ITC claimed for that invoice. Auditor should check for such cases and verify the treatment given. If any ITC is claimed in excess then interest at rate of 24% is payable on such amount.

Reverse Charge Mechanism: GST payable under Reverse Charge Mechanism (RCM) is to be paid in cash. Check whether ITC of this RCM is claimed in month it is applicable for.

Interest on late payment of GST: Interest at the rate of 18% is applicable on late payment of GST. Verify that calculations are as per applicable rate only and amount payable is paid within time. All notices related to interest, penalty are complied in time.

Matching of turnover under GST with turnover of Income tax: GST department and Incometax department exchange inofrmationand work in coordination with each other. It is important that entities turnover should match under both acts. Auditor should check and ensure reporting and returns are correct in all respect i both acts.

Stock transfer: Incase entity has multiple branches , stock is transferred from one branch to another. These intra and inter branch transfer are need to reconcile.

GST Registration: Check GST registration have all details matching with clients place of business , additional palce of business , director , partners details. Its also important to change HSN , SAC code given in at time of GST registration. Check if there are any casual registration taken during the audit period and they are surrendered?

Time of supply : Time of supply is important point in GST audit checklist. GST auditor need to check for Time of supply where goods are sent on sale or approval? If yes, check if documentation is carried out accordingly. Check GST invoice is issued as per the provisions of time of supply. If there is continuous supply such as in case of Government contracts etc. time of supply invoicing etc. is followed correctly.

Input Tax Credit : In GST audit , checking input tax credit is crucial points to avoid future notice, demand etc. Check if input tax credit is availed only on the receipt of goods or services only. Check the eligibility of input tax credit claimed. Check if matching is done between the GSTR – 2A and the purchase register. Ensure supplier details such as name , GST no. material details etc are correct on invoice.

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Further Details Checklist GST Audit

• GST Site id and password
• GST address , GST No of all branches , head office
• Check Additional Place of business mentioned in GST certificate
• List the HSN/SAC numbers used by the company for making any supplies.
• Check GST number displayed on company name board
• GST reconciliation of GSTR 3 VS GSTR 1
• Reconcile GST Return with financial statement
• Has the entity raised accounting debit notes to entities whose ITC is not appearing in GSTR-B
• Check Whether interest paid on GST late payment
• Check inter-branch transfers documents , records
• Check whether the tax invoice is issued for rental and other incomes?
• Check GST paid on advances ?
• Check whether a Credit note has been obtained for the corresponding debit note ?
• Check LUT Applied for GST export sales ?
• In the case of Job work, Input goods should be returned under one year.
• Check whether GST has been paid on RCM services?
• Check ITC Taken as per Law
• Examine the time of supply provisions.