If you look closely at the audit provisions under GST Act, you’ll find a lot of confusion and uncertainty over it. Do you have to get audited by department, or by a Chartered Accountant? Or you have to do it yourself? What are the threshold limits? All these things perplexes a common man and he often fails to comply with the provisions and rules due to inability to understand them. With the help of this series, I’ll try to tell you what you need to know about auditing under GST.
Auditing under GST is dealt with under sections 63 to 66.
Section 63 says that the commissioner of SGST/CGST or any officer appointed by them may conduct audit of any business transaction for such period at such frequency and in such manner as may be prescribed. There is no threshold limit as currently under Service tax and central excise.
Further, the audit will be conducted at place of the tax payer or his registered office.
The concerned person needs to be informed at least 15 working days prior to the conduct of audit.
The audit has to be completed within 3 months. If audit is not completed within this timeframe the Commissioner may, if he is satisfied, extend the period of audit for a further period not exceeding six months.
The term ‘commencement of audit’ is important because audit has to be completed within a given time frame in reference to the date of commencement. Commencement of audit means the later of the following-
The officer conducting audit has the responsibility to inform the taxable person without delay about his findings in the course of audit, the reasons for such findings and also the rights and obligations for the taxpayer.
Where the conduct of audit results in detection of tax not paid or short paid or erroneously refunded, or input tax credit erroneously availed, the officer may initiate action under relevant sections for determination of tax.
That’s all about Section 63 wherein the department conducts audit of a registered taxpayer. However, in certain cases the Tax Authority can get audit done by a Chartered Accountant or a Cost Accountant. It is termed as Special Audit and dealt with in section 64.
To know more about special audit, please read my next article.