{"id":907,"date":"2019-07-31T13:12:19","date_gmt":"2019-07-31T07:42:19","guid":{"rendered":"https:\/\/aktassociates.com\/blog\/?p=907"},"modified":"2020-01-15T11:01:05","modified_gmt":"2020-01-15T05:31:05","slug":"gst-audits-assessments","status":"publish","type":"post","link":"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/","title":{"rendered":"Audits Under Goods and Service Tax | State wise Threshold"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >In this article, we will discuss about...<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1e73be;color:#1e73be\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1e73be;color:#1e73be\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#Introduction\" title=\"Introduction\">Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#As_per_section_213_of_CGST_Act_2017_Audit_Means\" title=\"As per section 2(13) of CGST Act, 2017, Audit Means:\">As per section 2(13) of CGST Act, 2017, Audit Means:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#Under_GST_there_are_3_types_of_audit_which_are\" title=\"Under GST, there are 3 types of audit which are:\">Under GST, there are 3 types of audit which are:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#Audit_by_a_Chartered_Accountant_or_Cost_Accountant\" title=\"Audit by a Chartered Accountant or Cost Accountant\">Audit by a Chartered Accountant or Cost Accountant<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#As_per_section_26_of_CGST_Act_Aggregate_Turnover_Means\" title=\"As per section 2(6) of CGST Act, Aggregate Turnover Means:\">As per section 2(6) of CGST Act, Aggregate Turnover Means:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#Lets_understand_this_with_a_simple_example\" title=\"Let&#8217;s understand this with a simple example:\">Let&#8217;s understand this with a simple example:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#Now_let_us_understand_each_point\" title=\"Now let us understand each point:\">Now let us understand each point:<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Goods and Service Tax or GST as it is called follows a Mutual trust taxation system, Where Taxpayer files and pays GST on a self-assessment basis. However along with trusting the taxpayer to pay GST properly and disclose information faithfully it is also important to put checks &amp; balances to keep a watch on revenue leakage and also defaulting taxpayers. Hence under the GST Act, 2017 Various kind of Audit and its procedure has been prescribed. Let&#8217;s have a look at various types of Audits Under the GST Act 2017.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"As_per_section_213_of_CGST_Act_2017_Audit_Means\"><\/span>As per section 2(13) of CGST Act, 2017, Audit Means:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\">Examination of Records, returns and other documents maintained or furnished by the registered person under this Act or any other law,<\/li>\n<li style=\"font-weight: 400;\">Verify the correctness of turnover declared,<\/li>\n<li style=\"font-weight: 400;\">Taxes Paid,<\/li>\n<li style=\"font-weight: 400;\">Refund claimed and input tax credit availed and,<\/li>\n<li style=\"font-weight: 400;\">To assess compliance with the provisions of the act and rules made thereunder.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Under_GST_there_are_3_types_of_audit_which_are\"><\/span>Under GST, there are 3 types of audit which are:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li style=\"font-weight: 400;\">Audit by a Chartered Accountant or Cost Accountant (Section 35(5) read with 44(2) and Rule 80 of CGST Act, 2017)<\/li>\n<li style=\"font-weight: 400;\">Audit by the Tax Authorities (Section 65 of CGST Act, 2017)<\/li>\n<li style=\"font-weight: 400;\">Special Audit (Section 66 of CGST Act, 2017)<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">We will understand the concept of each audit under GST herewith.\u00a0<\/span><\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Audit_by_a_Chartered_Accountant_or_Cost_Accountant\"><\/span>Audit by a Chartered Accountant or Cost Accountant<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Every registered person whose <\/span><b>turnover<\/b> <b>exceeds<\/b><span style=\"font-weight: 400;\"> Rs. <\/span><b>2 crore<\/b><span style=\"font-weight: 400;\"> during a financial year, Falls under GST Audit Limit\u00a0 &amp; must get his accounts audited by a Chartered Accountant or Cost Accountant. This Audit Under GST is also known as Reconciliation Audit as in this audit, Figure shown in financial statements has to be reconciled through Figures appearing in GST Annual Return i.e. Form GSTR 9. Hence It needs to be clarified that the GST Audit limit is Rs 2 cr and not 1 cr as for Income Tax.\u00a0<\/span><\/p>\n<p><strong>He shall also be required to furnish the following documents electronically at GST Portal:<\/strong><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Copy of Annual Return (Form <a href=\"https:\/\/aktassociates.com\/blog\/gstr-9-everything-you-want-to-know-about-gst-annual-return\/\" target=\"_blank\" rel=\"noopener noreferrer\">GSTR-9<\/a> under Normal Scheme and GSTR-9A for Composite dealer) by 31<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> December of Next Year.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Copy of Audited Annual Accounts<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A Reconciliation Statement, reconciling the value of supplies declared in the annual return with the audited annual financial statement duly certified (GST Audit Report in Form GSTR-9C)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Other Particulars, as specified.<\/span><\/li>\n<\/ol>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-919\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/Flowchart-of-GST-Audit.png\" alt=\"Flowchart of GST Audit\" width=\"800\" height=\"844\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/Flowchart-of-GST-Audit.png 800w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/Flowchart-of-GST-Audit-284x300.png 284w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/Flowchart-of-GST-Audit-768x810.png 768w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/Flowchart-of-GST-Audit-20x20.png 20w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">It seems that a lot of people get confused between Turnover amount limit of Audit under GST and income tax Act, 1961. If we speak in simple words:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Audit Required<\/b><\/td>\n<td><b>When Turnover exceeds<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">The limit for GST Audit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2 Crore<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">44AB of IT Act<\/span><\/td>\n<td><span style=\"font-weight: 400;\">1 Crore<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">44AD of IT Act<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2Crore<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\"><strong>Note:<\/strong> <em>The definition of Turnover is different in both Act.<\/em><\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under GST, It is very important to calculate aggregate turnover accurately because your aggregate turnover will decide whether you required to get your accounts audited or not.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"As_per_section_26_of_CGST_Act_Aggregate_Turnover_Means\"><\/span>As per section 2(6) of CGST Act, Aggregate Turnover Means:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Value of all Outward Supplies, which include<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Taxable Supply<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Exempted Supply<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Exports<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Branch Transfer( I.e. Interstate supply to its branch having common PAN Number)<\/span><\/li>\n<\/ol>\n<p><strong>Note: <\/strong><em>Outward supply taxable under RCM would continue to be part of such a supplier.<\/em><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Lets_understand_this_with_a_simple_example\"><\/span>Let&#8217;s understand this with a simple example:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">M\/s ABC is a Lawyer firm providing Legal services in Delhi. It also has a business of trading of taxable goods in Mumbai. They have the following receipts during the year:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>S.No.<\/b><\/td>\n<td><b>Receipts<\/b><\/td>\n<td><b>Amount in Lakhs<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">1<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Sale of Taxable goods<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 100.00\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">2<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Legal services to Non Business Entity<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 20.00\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">3<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Sale of Goods outside India<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 20.00\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">4<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Transfer of goods from Delhi to Mumbai<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 50.00\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">5<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Legal services to Business Entity having a turnover of Rs.50 Lacs<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 20.00\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Total<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 210.00\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Now_let_us_understand_each_point\"><\/span>Now let us understand each point:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><b>Sale of Taxable Goods (100 Lakhs)<\/b><span style=\"font-weight: 400;\">: It is a taxable supply under GST, hence it will be included while calculating Aggregate Turnover.<\/span><\/li>\n<li><b>Legal services to Non-Business Entity (20 Lakhs)<\/b><span style=\"font-weight: 400;\">: As per Serial Number 45 of Notification Number 12\/2017, If any Legal services have been provided to any Non-Business Entity or business entity having a turnover in the last financial year is up to 20 lakhs, such service is exempted supply. <\/span>But still, the receipts from such services shall be included while calculating the turnover for Audit Under GST.<\/li>\n<li><b>Sale of Goods outside India (20 Lakhs): <\/b><span style=\"font-weight: 400;\">When goods have been exported outside India, GST shall not be charged. Although such receipts shall be included while calculating the aggregate turnover.<\/span><\/li>\n<li><b>Transfer of goods from Delhi to Mumbai (50 Lakhs): <\/b><span style=\"font-weight: 400;\">Although it was transferred to its own branch in other states, hence the amount shall be included in turnover. <\/span><\/li>\n<\/ul>\n<p><b>Note<\/b>: <em>Even if the firm has transferred goods without consideration then still it will be counted as supply as per Para 2 of Schedule I read with section 7 of the CGST Act, 2017.<\/em><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Legal services to Business Entity having turnover of Rs.50 Lacs (20 Lakhs): <\/b><span style=\"font-weight: 400;\">As per Notification Number 13\/2017 read with section 9(3) of CGST Act, 2017, if any legal services provided by advocate to any business entity, then such service shall be covered under RCM and such business entity shall be liable to pay GST.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Although, in this case, the liability to pay GST under RCM is on business entity still the turnover amount shall be included in Supplier Firm.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Note:<\/strong> <em>In this case, it is given that the business entity\u2019s last year turnover is Rs. 50 lakhs, if it was less than 20 lakh then it would be exempted supply as explained in point number 2. As the firm exceeds the GST Audit Limit. It required to be Audited Under GST.<\/em><\/span><\/p>\n<ul>\n<li><b>Audit by the Tax Authorities (Section 65 of CGST Act, 2017)<\/b><\/li>\n<li><b><span style=\"font-weight: 400;\">The Commissioner or<\/span><\/b><\/li>\n<li><span style=\"font-weight: 400;\">Any officer authorized by him\u00a0 by general or any specific order<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Can undertake the audit of any registered person\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the registered person&#8217;s place of business or the department office for the financial year or multiple.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The department shall issue a notice to the registered person within 15 working days before the conduct of the audit in form GST ADT-1.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Audit shall be completed within 3 months from the date of <\/span><b>commencement of audit<\/b><span style=\"font-weight: 400;\"> i.e. audit shall be completed within 90 days.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This period can be further extended by 6 Months if the commissioner is of the opinion that Audit can\u2019t be completed within 3 months.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Where the <\/span><b>commence of audit<\/b><span style=\"font-weight: 400;\"> means\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The date on which records are called by the department or<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Actual institution of Audit at the place of business of the registered person.<\/span><\/li>\n<\/ul>\n<p><b>For Example,<\/b><span style=\"font-weight: 400;\"> Records has been called by the commissioner for the audit under section 65 of the CGST Act as on 17<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> July 2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since notice period includes only <\/span><b>working days<\/b><span style=\"font-weight: 400;\">, It means, the commissioner has to send the notice as on 01<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> July 2019 (It is assumed that there are 2 Sundays from 01<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> July to 17<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> July 2019)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The last date to complete the audit is 15<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> Oct 2019 (i.e. 3 Months from 15<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> July 2019).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the commissioner may allow extending the period of the audit by a further 6 months.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The officer along with his team has to verify\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Documents on the basis of which the books of account are maintained and the returns and statements furnished under the provisions of the Act and the Rules made thereunder.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The correctness of the turnover<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Exemptions and deductions claimed<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Rate of tax applied in respect of the supply of goods or services or both<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Input tax credit availed and utilized<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Refund claimed<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Other relevant issues<\/span><\/li>\n<\/ul>\n<p><a href=\"https:\/\/aktassociates.com\/business-registrations\/tax-registration\/online-gst-registration\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-2070\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/gst-registration-1.png\" alt=\"gst registration\" width=\"700\" height=\"150\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/gst-registration-1.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/gst-registration-1-300x64.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/gst-registration-1-20x4.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Once the audit has been completed, the proper officer from the department shall, within 30 days, inform the registered person about his findings from the audit, the reason for findings and rights and obligations of a registered person in form GST ADT-2.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Where the Audit results in\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Detection of tax not paid or Short Paid or<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">ITC wrongly availed or utilized or<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Erroneously refunded<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u00a0The department shall initiate the action of demand &amp; recovery as defined U\/s 73 or 74.<\/span><\/p>\n<ul>\n<li><b>Special Audit (Section 66 of CGST Act, 2017)<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue,\u00a0<\/span><span style=\"font-weight: 400;\">is of the opinion that <\/span><\/p>\n<p><span style=\"font-weight: 400;\">T<\/span><span style=\"font-weight: 400;\">he value has not been correctly declared or\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The ITC availed is not within the normal limits,<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He may, with the prior <\/span><b>approval of the Commissioner<\/b><span style=\"font-weight: 400;\">,\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Direct such registered person, by a communication in writing, to get his records including books of account examined and <\/span><b>audited<\/b><span style=\"font-weight: 400;\"> by a <\/span><b>chartered accountant<\/b><span style=\"font-weight: 400;\"> or a <\/span><b>cost accountant<\/b><span style=\"font-weight: 400;\"> as may be <\/span><b>nominated by the Commissioner<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The officer has to issue\u00a0direction in FORM GST ADT-03 to the registered person in this regard.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The <\/span><b>Proper officer may order<\/b><span style=\"font-weight: 400;\">\u00a0the registered person for the special audit <\/span><b>even if his records have already been audited<\/b><span style=\"font-weight: 400;\"> under any other provisions of the GST Act or any other law.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The chartered accountant or cost accountant so nominated shall, <\/span><b>within the period of 90 days<\/b><span style=\"font-weight: 400;\">, submit a GST Audit report of such audit duly signed and certified by him to the said Assistant Commissioner.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Provided that the Assistant Commissioner may, <\/span><b>on an application<\/b><span style=\"font-weight: 400;\"> made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, <\/span><b>extend<\/b><span style=\"font-weight: 400;\"> the said period by a <\/span><b>further period of 90 days<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A special audit can be conducted even if the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The registered person shall be given an opportunity of being heard before taking any actions against him under this Act or the rules made thereunder.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The <\/span><b>expenses of the examination and audit of records<\/b><span style=\"font-weight: 400;\">, including the remuneration of such chartered accountant or cost accountant, shall be <\/span><b>determined and paid by the Commissioner<\/b><span style=\"font-weight: 400;\"> and such determination shall be final.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the <\/span><b>conclusion<\/b><span style=\"font-weight: 400;\"> of the special audit, the <\/span><b>registered person shall be informed<\/b><span style=\"font-weight: 400;\"> of the findings of the special audit <\/span><b>in FORM GST ADT-04<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Where the Audit results in\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Detection of tax not paid or Short Paid or<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">ITC wrongly availed or utilized or<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Erroneously refunded<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The department shall initiate the action of demand &amp; recovery as defined U\/s 73 or 74.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This provision is the same as section 65 of the CGST Act, 2017.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction Goods and Service Tax or GST as it is called follows a Mutual trust taxation system, Where Taxpayer files &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Audits Under Goods and Service Tax | State wise Threshold\" class=\"read-more button\" href=\"https:\/\/aktassociates.com\/blog\/gst-audits-assessments\/#more-907\">Read more<span class=\"screen-reader-text\">Audits Under Goods and Service Tax | State wise Threshold<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":910,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ 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