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According to GST, if any person has registered under the GST process, then that person will have to get his account audited with the help of a Chartered Accountant (CA) or CMA Accountant (Certified Management Accountant). Every registered person must undergo a GST audit based on the provisions of the GST Act. In this article, we will know what is an audit? How many types are there? And why is it needed?
What Are the Types of Audits Under Gst?
There are three types of GST audits, which are conducted in different sections. Let us try to know about them one by one below.
1. GST under article (35 to 5) based on annual income
Every person who has GST registration under sub-section (5) of section 35 of the CGST (Central Goods and Services Tax) Act, having a total turnover of more than two crore rupees in a financial year, shall be referred to get a GST audit conducted by a CA or CMA. In addition, they must furnish the details in FORM GSTR-9C.
This audit is done by the CA or CMA under the section of the CGST Act. In this, the calculation of total business will be based on PAN number (Permanent Account Number), which means when the annual income of the person registered under GST is found to be more than Rs 2 crore, then the business entities will be required to have a GST audit.
2. General Audit (Article 65)
The general audit is done by the GST authority. The GST authority for this audit may include the Commissioner of GST or any officer approved by him. But for conducting a general audit, notice before at least 15 days should be given to the registered person.
This audit can be done at the office of the business or the office of the GST authority. Also, the audit should be completed by the commissioning officer within 3 months from the date of initiation.
However, the commissioning officer may choose to extend the period, if he feels that the audit cannot be finished in 3 months. He can prolong the period of such audit up to a maximum of 6 months.
Thus, he may do so after recording the reasons for such extension in writing. Finally, within 30 days from the conclusion of the general audit, the person referred to in Form GST ADT-02 by the appropriate authority shall state the rights, obligations, and reasons for conducting the audit.
3. Special Audit (Article 66)
A special audit is scrutinized by a GST officer not below the rank of an Assistant Commissioner if he finds that the amount of tax has not been declared correctly by the registered person, or the input tax credit has been taken outside the normal limit.
Before ordering the audit by the Assistant Commissioner, the consent of the Commissioner must be obtained. Only after that, the appropriate officer can conduct the audit.
The special audit is conducted by the CA or CMA. Thereafter the audit report will be provided to the commissioner. This report will be given by the auditor within 90 days after the completion of the special audit.
If there is any problem with this report, then this period can be extended by 90 days if the officer gives sufficient reason. Finally, the conclusion of the audit will be communicated to the registered person through Form GST-ADT-04.