1. Definition of Audit under The Central Goods and Service Tax Act, 2017
  2. Type of Audit under The Central Goods and Service Tax Act, 2017
  3. List of Accounts and Records should be maintained by Registered Person and examined by auditor under The Central Goods and Service Tax Act, 2017

  

  1. Definition of Audit under The Central Goods and Service Tax Act, 2017

As per Section 2(13) of Central Goods and Service Tax Act, 2017

  • “audit” means the examination of
    • records, (As per Section Accounts and other records explained below)
    • returns and
    • other documents
  • maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to
  • verify the correctness of
    • turnover declared,
    • taxes paid,
    • refund claimed and
    • input tax credit availed,
  • and to assess his compliance with the provisions of this Act or the rules made thereunder;

Analysis

  • The term audit covers vital scope in general. Under the Goods and Service Tax Act, 2017 audit is specifically defined.
  • It covers examination of the examination of records and documents it extends to examination of records and documents under any other law also which means records and documents maintained under The Income Tax Act,1961, The Companies Act, 2013, etc. is to be examined under the audit
  • By the verbal interpretation of definition, it is clear that audit would be conducted to the person who is registered under the Goods and Service Tax Act, 2017. Unregistered person is not covered under the purview of Goods and Service Tax audit.
  • As per the definition it the purpose of audit puts exhaustive responsibilities on auditor to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed and it extend to assess all compliance with provisions of the Goods and Service Tax Act, 2017.
  1. Type of Audit under The Goods and Service Tax Act, 2017

 (a)  Audit by chartered accountant or a cost accountant

  • Aggregate Turnover exceeds prescribed limit of Rs. 2 Crore: As per Section 35(5) of the Central Goods and Service Tax Act, 2017 read with rule 80(3) of Central Goods and Services Tax (CGST) Rules, 2017 every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited by a chartered accountant or a cost accountant Accounts.
  • Special Audit Assigned by department: As per Section 66(1) of the Central Goods and Service Tax Act, 2017

(b) Audit by tax authorities

  • As per section 65(1) of Central Goods and Service Tax Act, 2017 the Commissioner or any officer authorised by him undertake audit of any registered person.

It is worthwhile to mention that Section 61 of the Central Goods and Service Act, 2017 provides that if the proper officer is not satisfied with the scrutiny of returns filed by registered person under the act may refer audit under section 65 or 66 of the Goods and Service Tax Act,2017.

  1. List of Accounts and Records should be maintained by Registered Person and to be examined by auditor under The Central Goods and Service Tax Act, 2017

Section 35 of the Goods and Service Tax Act, 2017 provides that

1) Every registered person shall keep and maintain, at his principal place of business, as
mentioned in the certificate of registration, a true and correct account of—
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed:

Further Rule 56. of Central Goods and Services Tax (CGST) Rules,2017 Prescribes the manner of Maintenance of accounts by registered persons.

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