All about GST Audit you should know

  • Blog|GST & Customs|
  • 3 Min Read
  • By Taxmann
  • |
  • Last Updated on 15 July, 2022

1. GST Procedure for Audit, Assessment, Ruling & Recovery

Goods and Services Tax (GST) structure is formed to float a transparent and efficient tax collection process in the country and reduce related corruption in inter-State movement of goods, etc. A taxpayer can himself access his tax liabilities and pay his related taxes. The GST Rules also explain the provision of demand and recovery in case taxes are unpaid, short paid, or return not filed properly.

2. GST Audits

GST Audits is the examination of taxpayers’ records to see if he complies with GST Rules and has paid all their tax dues. A Tax Payer can perform GST Audit himself or by GST authorized personnel’s depending on different circumstances. GST Audit by Tax Payer is done if his turnover is more than Rs. 2 crores. In this case, he must submit his audited returns, with details of his audited accounts and his reconciliation statements. GST Audit by Tax Authorities is done either by a Tax commissioner or taxpayer may be liable for a special audit which is done by a Chartered Accountant as nominated by the commissioner depending on the requirement under GST Rules.

Taxmann’s GST Audit and Annual Return – F.Y. 2019-20 caters to handle the preparation and filing of GSTR 9, GSTR 9A/4, and GSTR 9C for FY 2019-20 which is currently supposed to be filed till 28th February 2021. This book serves as a ready referencer for all the professionals like CA and their Articles, CS, CWA, Advocates, etc. in handling audit and annual return assignments.

3. Types of Assessments under GST:

GST Assessment is the process of determination of total tax liability by a taxpayer under GST Rules. There are 5 types of assessments under GST-

3.1 Self-Assessment 

Taxpayer does this kind of assessment himself to furnish taxes for the relevant tax period.

3.2 Provisional Assessment

In case a registered dealer is unable to determine his tax liability on his own, he can request a GST Tax officer to assess his tax and that tax officer can allow the taxpayer to pay his taxes based on provisions as per records submitted by him.

3.3 Scrutiny Assessment

This kind of assessment is carried on by GST Officer to verify the correctness of the return filed under GST Rules. In case he finds any discrepancies, he may ask the taxpayer for the reasons for such gaps.

3.4 Summary Assessment

An assessing officer does this kind of assessment when he believes that any delay in assessment may impact the revenue. This kind of assessment can be passed after approval from an additional joint commissioner.

3.5 Best Judgement Assessment

This kind of assessment is done in two cases. One is when the assessment must be done for non-filers. That is when a registered taxpayer is liable to pay the taxes but he does not file his returns even after getting a legal notice about it, then GST Officer assess his tax liability based on his best judgment as per available records. Second, this kind of assessment is done for a taxpayer who fails to register himself due to any reasons. In such a case, the taxpayer is liable to also show the cause of him being unregistered.

4. Provision for demand and Recovery under GST Rules:

When a registered dealer does not comply with GST Rules during his tax filing and have paid his taxes incorrectly or claims that he has received an incorrect refund then demand and recovery provisions are applicable. In such a case a GST Officer will issue a show-cause notice towards the taxpayer and will ask him to pay the rest of the taxes along with any penalty if applicable. In terms of GST Rules, demand of such notice may arise in one of the below cases –

  • When there are unpaid or short paid taxes or there are wrong refunds.
  • When the tax collected at sources is not deposited towards Central or State Government as applicable.
  • When CGST or SGST is paid however IGST was payable or it’s the other way around.
  • When demand is not paid, the GST authority starts the recovery process.

5. Advance Ruling:

Under GST Rules, there is also a provision for an advance ruling where a taxpayer may seek clarification from some authorized GST personnel on tax-related matters before starting a legal procedure. This is often done to reduce unnecessary costly litigations.

Dive Deeper:
GST Audit Checklist, Rules & Applicability
Types of GST Audit
Can GST Practitioners conduct GST Audit?


Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

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