GST Audit – Complete Guide for Businesses

What is a GST Audit?

A GST Audit is the examination of records, returns, and other related documents maintained by a registered taxpayer to verify:

  • The correctness of turnover declared
  • Taxes paid
  • Refunds claimed
  • Input Tax Credit (ITC) availed
  • Compliance with GST provisions

It ensures that the taxpayer has complied with the GST law in both letter and spirit.

Types of GST Audit

  1. Turnover-based Audit (Section 35(5))
    • Applicable when annual aggregate turnover exceeds the prescribed limit (as per current GST law).
    • Conducted by a Chartered Accountant (CA) or Cost Accountant.
  2. General Audit by Tax Authorities (Section 65)
    • Initiated by the Commissioner or authorized officer.
    • Prior notice is issued at least 15 days before the audit.
  3. Special Audit (Section 66)
    • Ordered by the GST officer during scrutiny if complexity is involved.
    • Conducted by a CA/Cost Accountant nominated by the Commissioner.

Who is Liable for GST Audit?

  • Businesses exceeding the prescribed turnover limit in a financial year.
  • Any taxpayer specifically instructed by the GST department.
  • Cases where records require deeper verification.

Documents Required for GST Audit

  • GST registration certificate
  • GST returns (GSTR-1, GSTR-3B, GSTR-9, etc.)
  • Purchase and sales invoices
  • Input Tax Credit (ITC) records
  • E-way bills
  • Stock register
  • Bank statements
  • Tax payment challans
  • Financial statements (Balance Sheet, P&L, Ledger)

GST Audit Process

  1. Notice Issuance – GST department issues notice for audit initiation.
  2. Document Submission – Taxpayer provides requested records & returns.
  3. Verification – Auditor verifies transactions, ITC claims, and compliance.
  4. Audit Report – Findings recorded in audit report with discrepancies (if any).
  5. Final Action – Taxpayer may need to pay additional tax, interest, or penalties based on findings.

Consequences of Non-Compliance

  • Demand for tax along with interest @ 18% per annum.
  • Penalty up to 10% of tax due or ₹10,000 (whichever is higher).
  • Risk of further investigation or scrutiny.

Benefits of a GST Audit

  • Identifies compliance gaps early.
  • Avoids penalties & legal issues.
  • Builds trust with tax authorities.
  • Ensures accurate ITC claims & tax payments.

Why Choose Us for GST Audit?

  • ✔ Experienced CA team with deep GST expertise
  • ✔ Complete end-to-end audit assistance
  • ✔ Accurate reporting and compliance checks
  • ✔ Timely filing to avoid penalties