B.Com,FCA, CS, LLB, DISA(ICAI)

B.Com,FCA, CS, LLB, DISA(ICAI)
An Insight to GST Audit CA Bikash Agarwala B.Com,FCA, CS, LLB, DISA(ICAI) Guwahati Branch

Contents-Part-1 Legal Provisions- GST Audit –Sec 2(13), Sec -44(2), Rule 80(3) Concept of Turnover Introduction to notified Form 9C

Legal Provisions Section 2(13) “Audit” means
the examination of records, 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

Legal Provisions Section 2(13) d) 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;

Legal Provisions Section 35(5) Rule 80(3) Every registered person
Whose “Turnover” during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and Every registered person* whose “Aggregate Turnover” during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and *Other than those referred to in the proviso to sub-section (5) of section 35

Legal Provisions Section 35(5) Rule 80(3) shall submit a copy of the:
audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed. he shall furnish a copy of: audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Section 44(2) Every registered person
who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, Form-9C reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.

Penalty/Late Fee “Section 47(2) provides that in case of failure to submit the annual return within the specified time, a late fee shall be leviable. The said late fee would be Rs. 100 per day during which such failure continues subject to a maximum of a quarter percent of the turnover in the State/UT There is no specific penalty prescribed in the GST Law for not getting the accounts audited by a Chartered Accountant or a Cost Accountant. Therefore, as per Sec 125 maximum penalty of up to 25,000/- can be imposed.

Aggregate Turnover-Sec-2(6)
Means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), Exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess; Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Exempt/Non Taxable Supplies
Sec-2(47)- Exempt Supply means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11 of The CGST Act, or under section 6 of the IGST Act, and includes non-taxable supply; Sec-2(78)-“Non-taxable Supply” means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act. Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Turnover in a State-Sec-2(112)
“Turnover in State” or “turnover in Union territory” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess; Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Aggregate Turnover Example-1
Value of Supply (Sales or service) 1.90 Crore Sales of Fixed Assets(Vehicle) Crore (Although the Taxable value of sale of fixed Assets is only 5 Lacs) Aggregate Turnover for Audit Crore Exempt Supply includes supply exempted u/s 11 and old motor car taxable value is difference between book value and Sales value as per Not No: 8/2018 (Rate) is notified as per the power u/s 11 Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Value of Supply (Sales or service) 1.50 Crore Unadjusted Advance for Services 0.20 Crore Unadjusted Advance for Goods Crore (Received before 15th Nov 17) Aggregate Turnover for Audit Crore Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Aggregate Turnover Example-3-XYZ a partnership firm having branches in Delhi & Guwahati Value of Sales from Delhi Crore Stock transfer to Guwahati Crore (Deemed Supply Schedule-1) Value of Sales from Guwahati Crore Turnover for Income Tax Crore (Unaudited Case) Aggregate Turnover for GST Audit Crore Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Turnover as per Books of Account 2.50 Crore Unadjusted Advance on which Service Tax paid in Crore Aggregate Turnover Income Tax Audit Crore For the purpose of GST Audit what will be the turnover????? Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Aggregate Turnover Example-5 (Jwellers dealing in second hand goods)
Turnover as per Books of Account 2.50 Crore Taxable supply as per Rule-32(5) 0.50 Crore Aggregate Turnover Income Tax Audit Crore For the purpose of GST Audit what will be the turnover????? Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Aggregate Turnover Example-6 (A Registered Person)
Turnover as per Books of Account 1.50 Crore Sale of Land(Fixed Assets) Crore Aggregate Turnover Income Tax Audit Crore Aggregate Turnover under GST Crore (Because Sale on Land is not a supply falling under Schedule-III) Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Aggregate Turnover Example-7 (A Registered Person)
Turnover as per Books of Account 1.50 Crore Sale of Land(Stock in Trade) Crore Aggregate Turnover Income Tax Audit Crore Aggregate Turnover under GST Crore (Because Sale on Land is not a supply as falling under Schedule-III) (However for the purpose of 17(3) Land is exempt supply for reversal of ITC) Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

Applicability to Class of Registered Person
Every RP, other than an Input Service Distributor, a person paying tax under section 51 (TDS), a person paying tax under section 52 (TCS), a casual taxable person and a non-resident taxable person, Other than any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force (CGST Amendment Act 18 w.e.f 1/2/019, Notification No:3/2019 W.e.f 1/2/2019) Whose aggregate turnover in a financial year exceed Rs 2 Crore Section 35(5) begins with the expression “turnover”exceeds the prescribed limit” Rule 80(3) -whose aggregate turnover exceeds two crore rupees”.

GSTR 9C- Form Level Overview
Part A- Reconciliation Statement Part B- Certificate Part-A- has five Table & Part-B is certificate by auditor

GSTR-9C-Part-A Part Nature Sl No Source Part-I Basic Details 1-4
Registration Certificate 5-6 Audit/Auditor Part-II Reconciliation of Turnover 5(A to R) 6 GSTR-9, 3B, GSTR-1,Audited Statement, Books of Accounts, GSTN wise TB, ITR Reason for unreconciled Turnover

GSTR-9C-Part-A Part Nature Sl No Source Part-II
Reconciliation of Taxable Turnover Reason for unreconciled Difference in Taxable Turnover 7(A to G) 8 GSTR-1, GSTR-3B, GSTR-9, Audited Accounts Part-III Reconciliation of Taxes Payable (Tax Rate wise with GSTS-9) Reason for unreconciled Tax Payable 9(A to R) 10(A) GSTR-3B, GSTR-1 and GSTR-9, Cash Ledger, Calculation sheet

GSTR-9C-Part-A Part Nature Sl No Source Part-III
Additional Liability Payable, Tax Rate wise 7(A to G) 8 GSTR-1, GSTR-3B, GSTR-9, Audited Accounts Reconciliation of Taxes Payable (Tax Rate wise with GSTS-9) Reason for unreconciled Tax Payable 9(A to R) 10(A) GSTR-3B, GSTR-1 and GSTR-9, Cash Ledger, Calculation sheet

GSTR-9C-Part-A Part Nature Sl No Source Part-III
Additional Liability Payable but not paid 11(A to K) Books of Accounts, and Annual Return Part-IV Reconciliation of Input Tax Credit 12 (A to F) 13 Audited Accounts, GSTR-3B, GSTR-2A, Annual Return Reason for unreconciled ITC

GSTR-9C-Part-A Part Nature Sl No Source Part-IV
Reconciliation of Total ITC Claimed and Expenses Head wise ITC Claimed 14(A to S) Books of Accounts, GSTR-9 Un-Reconciled ITC Reason for Unreconciled ITC 14(T) 15A GSTR-9 and Books of Accounts

GSTR-9C-Part-A Part Nature Sl No Source Part-IV
Tax Payable on Un-Reconciliation ITC 16(A to F) GSTR-9 Part-V Auditors Recommendation A TO O Audit Working and Observation

Part I-Basic Details Sl. No. Financial Year 1 GSTIN 2 Legal Name 3A
Trade Name (If any) 3B Are you liable to audit under any Act (Please specify) 4

FORM-9C-PART-II -5A Turnover (including exports) as per Audited Financial Statement for the State / UT (For multi-GSTIN units under same PAN, the turnover shall be derived from the Audited Annual Financial Statements )*

FORM-9C-PART-II -5A In case of multiple registration the turnover has to be derived internally Deemed Supply not be included here In case of multiple auditor for multiple registration care should be taken to reconcile the turnover with audited financial statements In case of unaudited case care should be taken to derive the turnover and suitable disclosure should be given. And the Balance Sheet and profit & Loss Account has to be prepared and audited

FORM-9C-PART-II Addition Item 5B
Unbilled revenue at the beginning of the Financial Year 5C Unadjusted advances at the end of the Financial Year 5D Deemed Supply under Schedule I 5F Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST

FORM-9C-PART-II Addition Item 5J
Credit notes accounted for in the audited Annual Financial Statement but are not permissible under GST

FORM-9C-PART-II-5B (Unbilled Revenue at the Beginning of FY)
Revenue Recognised in previous year as per accrual system or AS-7 etc but billed in GST need to be reported here. Example: Revenue Recognised as on 31/3/17 Rs 5.00 Croe (construction Contractor AS-7) Total Amount billed as on 31/3/17 Rs 3.80 Crore Unbilled Revenue at the Beginning of year Rs 1.20 Crore

FORM-9C-PART-II-5C (Unadjusted Advance at the end of the of FY)
Unadjusted advance i.e the advance against which supply not made/bill not issued to be added here For Goods: Unadjusted Advance received before 15th Nov 2017 (Not. No: 66 –CGST-Rate-15/11/2017) For Services: Unadjusted Advance received during

FORM-9C-PART-II-5D (Deemed Supply)
Aggregate value of Deemed Supply ( Schedule-1 of The CGST Act) to be added here. Permanent Transfer or disposal of business assets where input tax credit has been availed on such assets Supply of goods or services or both between related persons or between distinct persons as specified in Section 25, when made in the course or furtherance of business (stock transfer between Branches) Supply of goods- (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.

FORM-9C-PART-II-5D (Deemed Supply)
d) Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business These transaction are not reported in Financial Statement, details has to be extracted from books of Account, E-way Bill in case of Goods & other records maintained, and care has to be taken for valuation of these transaction specially where full ITC not available

FORM-9C-PART-II-5F (Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST ) If Trade discount which are not permitted under GST for valuation has been issued If Supply value has been reduced by the amount of trade discount in Audited Financial Statement Example: Sales during Rs Crore Without GST Trade Discount Rs Crore Sales reported in profit & Loss Account 195 Crore.

FORM-9C-PART-II-5J (Credit notes accounted for in the audited Annual Financial Statement but are not permissible under GST) If without GST Credit note issued and supply has been reduced to that extent in audited Financial statement, the same should have to be reported here. (In the Notification No: 49/2018 whereby Form-9C was notified these has been shown as (-) and in guidanace note also it is shown as (-)

VALUE TO BE DECUTED FROM TURNOVER AS PER AUDITED FINANCIAL STATEMENT
FORM-9C VALUE TO BE DECUTED FROM TURNOVER AS PER AUDITED FINANCIAL STATEMENT

FORM-9C-PART-II Deduction(SL No) Item 5E
Credit Notes issued after the end of the financial year but reflected in the annual return 5G Turnover from April 2017 to June 2017 * 5H Unbilled revenue as at the end of the Financial Year 5I Unadjusted Advances as at the beginning of the Financial Year

FORM-9C-PART-II Deduction(SL No) Item 5K
Adjustments on account of supply of goods by SEZ units to DTA Units 5L Turnover for the period under composition scheme

This is very uncommon and generally this will be mostly NIL.
FORM-9C-PART-II-5E (Credit Notes issued after the end of the financial year but reflected in the annual return ) This is very uncommon and generally this will be mostly NIL.

FORM-9C-PART-II-5G (Turnover for the period April to June 17 )
Turnover as per Trading/Profit & Loss Account for April –June 17 Advance Received in April to June 17 on which services Tax Paid Sec-142(11)(b) although supply made after 1st July 2017 Cross Verification of turnover with Excise/VAT/ Service Tax Returns

FORM-9C-PART-II-5H (Unbilled Revenue at the emd of FY)
Revenue Recognised (Service only) in previous year 31/3/18 as per accrual system but invoice raised as per Sec -31(2) of The CGST Act. Example: Revenue Recognised as on 31/3/18 Rs 0.10 Croe Billed on 10th April Rs 0.10 Crore

FORM-9C-PART-II-5I (Unadjusted Advance at the beginning of the of FY)
Unadjusted advance at the beginning of the FY i.e the advance against which supply not but taxes has him paid as per point of sale rule under the Service Tax Law or as advance on services on Goods as per GST Law to be deduucted here For Services: Unadjusted Advance received during on which service tax has already been paid as point of sale rule.

FORM-9C-PART-II-5K (Adjustments on account of supply of goods by SEZ units to DTA Units )
Aggregate value of all goods supplied by SEZs to DTA units for which the DTA units have filed bill of entry shall be declared here. Supply by SEZ to DTA is a sale for financial statement but not required to be reported as GST supply and the DTA filed Bill of entry.

FORM-9C-PART-II-5K (Turnover for the period under composition scheme)
Turnover during the period the RP is under compositions scheme need to be reduced from here RP has to file a separate return for the period of composition scheme in GSTR-9A, These information will flow from GSTR-4

FORM-9C VALUE TO BE DEDUCTED/ADDED FROM TURNOVER AS PER AUDITED FINANCIAL STATEMENT

FORM-9C-PART-II Addition/Deduction Item 5M
Adjustments in turnover under section 15 and rules thereunder 5N Adjustments in Turnover due to foreign exchange fluctuation 5O Adjustment in Turnover due to reasons not listed above

FORM-9C-PART-II-5M (Adjustments in turnover under section 15 and rules there under )
Sec-15-Value of supply – Price is the sole Consideration and receipent is an unrelated party price paid will be the value of supply Value of supply include any taxes, duties, cesses, fees and charges levied e.g labour cess, Environment Cess, Green Energy Cess etc Incidental expenses e.g freight, packing & forwarding etc charged in bill. The item b & C need to be added in turnover if the same are accounted for other than as outward supply in books of Account

FORM-9C-PART-II-5M (Adjustments in turnover under section 15 and rules there under )
Deduction required a) Discount given in bill but sale booked before discount in financial statement and discount accounted for as expenses. b) Discount given after supply as per the pre-determined terms of supply but are booked as expenses.

Supply Value of service Rs 10000/- Labour Cess Rs 100/-
FORM-9C-PART-II-5M (Adjustments in turnover under section 15 and rules there under ) Example for Addition Supply Value of service Rs 10000/- Labour Cess Rs /- Supply recorded as Rs 10000/- Labour Cess Rs 100/- recorded as liability and at the time of payment

Less: Discount in invoice Rs 100/- Value of Supply for GST Rs 9900/-
FORM-9C-PART-II-5M (Adjustments in turnover under section 15 and rules there under ) Example for Deduction Value of Goods Rs 10000/- Less: Discount in invoice Rs /- Value of Supply for GST Rs 9900/- Sales recorded as Rs 10000/- and discount shown as expenses Rs 100/-

Valuation of supply for GST is governed by Rule-34 of The CGST Rule.
FORM-9C-PART-II-5N (Adjustments in turnover due to foreign exchange fluctuation ) Forex Transaction are in books are recorded as per Accounting Standard 11 Valuation of supply for GST is governed by Rule-34 of The CGST Rule. Thus any difference between the amount recorded in books and outward supply in GST return to be adjusted here

FORM-9C-PART-II-5O (Adjustments in turnover due to REASON NOT LISTED ABOVE)
Examples Turnover considered as supply during audit but not considered as Income in the Books/financial statement. Stock issued to discharge CSR obligation Sales promotion/Advertisement reimbursement received considered as supply Value on which GST paid on Capital Goods b) Item to be deducted Profit on sale of Capital Goods Return of Outward Supply considered as Inward Supply

FORM-9C-PART-II-5P & 5Q 5P-After the adjustment made to turnover in terms of Clause-5B to 5O Annual Turnover after adjustment will be derived 5Q- Here turnover as declared in GSTR-9 will be reported which will be derived from Sr No: 5N, 10 & 11 (i.e 5N of GSTR-9) 5R- (5P-5Q) Ideally there should not be any difference, but if any unreconciled figure the same will automatically reflect here.

Pt. II- Reconciliation of Taxable Turnover

FORM-9C-PART-II-7A TO 7G . 7A Turnover as reported in 5P above Less 7B
Value of Exempt, NIL Rated, Non GST turnover 7C Zero Rated Supply without payment of Tax 7D Supply on which GST is payable by recipient 7E Taxable Turnover after adjustment(7A-B-C-D) 7F Taxable Turnover as per GSTR-9( 4N-4G+10-11) 7G Unreconciled .

Reason for Un-Reconciled Taxable turnover need to be reported here
FORM-9C-PART-II-8 Reason for Un-Reconciled Taxable turnover need to be reported here

Reconciliation of rate wise liability and amount payable thereon- Table 9
Tax Payable Description Table T. Value CGST SGST/UTGST IGST Cess, if Applicable Tax Rate wise liability including tax paid under RCM on inward supply 9A-9K Interest 9L Late Fee 9M Penalty 9N Others 9O Total amount to be paid 9P

Un-reconciled payment of amount-Table 10
Tax Payable Description Table T. Value CGST SGST/UTGST IGST Cess, if Applicable Total amount paid as declared in AR 9Q Un-reconciled amount 9R Reasons for Un-reconciled payment of amount (Sl. 10)

Additional Amount Payable-Table 11
To be paid through cash Description Taxable Value CGST SGST/UTGST IGST Cess, if Applicable Liability under all rates including RCM (e.g. 5%, 12% & so on) Interest Late Fee Penalty Others

FORM-9C-PART-IV-12, 13, 14 & 15, 16 Under this part reconciliation of ITC as per Books and Annual Return to be reported in Part-IV-12 A to E Reason for any unreconciled ITC to be given in 13 Expenses wise ITC Reconciliation to be given in 14 (No column for reporting of credit taken through TRAN-1 & TRAN-2) Reason for any unreconciled ITC to be given in 15 Tax Payable on unreconciled item to be reported here

Auditor’s recommendation on additional liability- Part. V
Auditor Recommendation of Tax Payable due to Un-Reconciled Taxable Turnover Un-Reconciled ITC Any other amount payable refund erroneously given Any other outstanding demand to be settled

Verification Part. V Here the auditor has to give a verification after the recommendation, the issues are The Verification is without any option for disclaimer/ observation etc When there is a certification in Part-B why this verification is required to be given

GSTR 9C- Form Level Overview
Part B- Certification BI: Reconciliation statement drawn by the Auditor who has conducted the audit BII: Reconciliation statement drawn by the Auditor who has not conducted the audit

B1. (Statutory & GST auditor same person)
Based on Audit report that RP has Maintained Books of Account, Records and Documents as required under GST Act and Rule & notifiications Report the observation or discrepancies if any Further report that: Information and explanations has / has not been obtained which were necessary for the purpose of audit Proper books of accounts have / have not been kept C. Financials are / are not in agreement with the books

B1. (Statutory & GST auditor same person)
State whether GSTR 9C and other relevant documents are annexed Particulars in GSTR 9C are ‘true and correct’ subject to observations/Qualifications

B2. (Statutory & GST auditor not the same person)
Report that audit of Books of Accounts & Financial Statement has been conducted by the other auditor with his name and membership number which is annexed here with. Report that said RP had maintained Books of Account, Records and Documents as required under GST Act and Rule & notifications Report the observation or discrepancies if any Particulars in GSTR 9C are ‘true and correct’ subject to observations/Qualifications

Multiple Registration
Obtain GSTN wise Trial Balance Verify transaction between Branches of Same entity Use of Common Infrastructure Inter Branch Transaction not recorded in Books Valuation of Supply between branches the examination of records, 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 Records: Section 35(1) read with Rule 80 Section 2(97): “return” means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder;

Multiple Registration
f) Cost incurred commonly g) Basis of bifurcation of credit by ISD Records: Section 35(1) read with Rule 80 Section 2(97): “return” means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder;

Books not Audited under any Other Law
Example: M/s XYZ a partnership firm having office in Delhi and Guwahati Delhi Branch: Sale 40 Lac & Stock transfer to Guwahati 110 Lac Guwahati Branch: Sales 120 Lacs Turnover under Income Tax : 160 Lac Aggregate Turnover under GST: 270 Lac Records: Section 35(1) read with Rule 80 Section 2(97): “return” means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder;

Books not Audited under any Other Law
If Books are not audited under any other law, we have to audit the Balance Sheet and Profit & Loss Account. The audit of B/S & P/L account should be restricted to the provision of GST law and the same should be disclosed suitabily The audited B/S & P/L account has to be attached Records: Section 35(1) read with Rule 80 Section 2(97): “return” means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder;

Audit Vs Certificate

Guidance Note on Reports or Certificates for Special Purposes (Revised 2016)
Para-3 The word ‘certificate’ as described in the laws and regulations or even in the contracts that an entity might have entered into can normally be associated with reasonable assurance. However, depending upon the circumstances and based upon the nature, timing and extent of the procedures which a practitioner can perform, the practitioner can conclude that a reasonable assurance cannot be expressed on the subject matter of the “certificate” and only limited assurance conclusion can be given. .

The practitioner’s procedures in case where reasonable assurance is to be expressed would be substantially different (and more extensive) from circumstances where limited assurance is to be expressed.

Para 3: Sometimes, the applicable law and regulation or a contractual arrangement that an entity might have entered into, prescribe the wording of report or certificates. The wording often requires the use of word or phrase like “certify” or “true and correct” to indicate absolute level of assurance expected to be provided by the practitioner on the subject matter. Absolute assurance indicates that a practitioner has performed procedures as considered appropriate to reduce the engagement risk to zero.

Para 4: A practitioner is expected to provide either a:
Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) Para 4: A practitioner is expected to provide either a: Reasonable assurance(about whether the subject matter of examination is materially misstated); or Limited assurance (stating that nothing has come to the practitioner’s attention that causes the practitioner to believe that the subject matter is materially misstated). A practitioner is not expected to reduce the engagement risk to zero. This is because there are inherent limitations attached to the procedures which a practitioner may perform in relation to issuance of a report or certificate, as the case may be.

The inherent limitations arise from:
Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) The inherent limitations arise from: the nature of financial reporting; the use of selective testing; the inherent limitations of internal controls; the fact that much of the evidence available to the practitioner is persuasive rather than conclusive; the nature of procedures to be performed in a specific situation; the use of professional judgment in gathering and evaluating evidence and forming conclusions based on that evidence; In some cases, the characteristics of the underlying subject matter when evaluated or measured against the criteria; and h) the need for the engagement to be conducted within a reasonable period of time and at a reasonable cost.

Para 5: In view of the above, depending upon the nature, timing and extent of procedures that can be performed based upon the facts and circumstances of the case, a report or certificate issued by a practitioner can provide either reasonable or limited level of assurance. Therefore, whenever a practitioner is required to give a “certificate” or a “report” for special purpose, the practitioner needs to undertake a careful evaluation of the scope of the engagement.

GST Audit Vs Departmental Audit
Sec-65/Rule-101- CSGT - Audit by Department The Commissioner or person authorized by him can undertake Audit u/s 65 Audit Can be conducted at Business or Department Premises 15 Days notice before Audit in Form-ADT-01 Audit to be completed within 3 months unless extended Discrepancies noticed to be informed to Assessee Audit Finding to be intimated in ADT-02 within 30 days

GST Audit Vs Departmental Audit
Sec-65/Rule-101- CSGT - Audit by Department g) The Assessee is required to furnish all the documents and information as required by the Audit Team h) On Audit Finding if short payment or Tax/ Erroneous refund/ITC wrongly availed/utilized is detected proceeding U/s 73 or 74 may be initiated

GST Audit Vs Special Audit
Sec-66/Rule-102- CSGT – In the interest of revenue an Officer not below the rank of Asst CT with prior approval of Commissioner at any Stage of scrutiny, inquiry, investigation any other proceedings before him Is of the opinion that Supply not declared properly ITC wrongly availed Can Direct the assessee in ADT-03 to get his accounts audited by a CA/CMA as nominated by Commissioner

Books of Accounts or other documents required to be maintained
Sec-35 – Every RP is required to maintain a true and correct account separately for principal place and other business place separately Manufacturing Account Details of inward & outward supply of goods or service or both Details of ITC availed Out put tax payable and Paid

Rule-56 Every RP is required to maintain in addition to the requirement of Sec-35 records of Goods or services exported or imported Details of supplies attracting RCM Invoices Bill of Supply Delivery Challan Credit Notes Debit Notes Receipt Voucher Payment Voucher Refund Voucher

Details of Stock Opening Stock Receipt Supply Goods lost, Stolen, Destroyed Written off Disposed off by way of Gift or sample Closing stock of Raw Materials, FG, Scrap,etc Details of Advance Received, Paid and adjustment

Details of All Tax Payable, ITC Claimed, Tax Paid Name and address of all Inward supplier Name and address of person to whom outward supplies has been made for all B2B supplies and for all supplies in excess of Rs 50,000/- Complete address of places where goods are stored Any entry in Books or other documents shall not be erased and entries if to be corrected should be scoredout under attestation and correct entry to be made

In case of elcrtonic data a log of all deleted and edited data shall be maintained-Rule-56D Maintain authorization and details of all goods received or supplied and accounts furnished to principal and tax paid on such transaction- Rule-56(11) Details of Monthly Production Account-56(12) Quantitaive details of goods used in provision of service Details of works contract executed, goods and services used, Details of payment received

Books of Accounts or other documents required to be maintained-Rule 57
Maiantain Proper Electronic Back-up of data to retrieve within reasonable time in case of destruction of data due to any reason Provide the authenticated hard copy or in electronic readable format Provide files, password, code used to maintain electronic data

Books of Accounts or other documents required to be maintained-Rule 58
Every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter (registered or unregistered) shall submit the details regarding his business on the common Poral in ENR-01.

Scope of GST Audit Verification of Books of Account, return, records documents etc Outward Supply Ascertain the transaction which is a Supply under GST Verify if a transaction of Inter State or Intra State Verify whether Proper tax has been charged Invoice as required under the Law has been issued Whether Outward supply is disclosed in the return Whether supply has been valued as per Sec 15 read with rule 27 to 35

Scope of GST Audit Verification of Books of Account, return, records documents etc Inward Supply Whether ITC claimed on inward supply fulfill the condition u/s 16 If any ITC claimed is blocked u/s 17(5) Whether or not ineligible ITC has been reversed as per Sec 17 read with Rule 42 Whether Tax has been paid on inward supplies u/s 9(3) and 9(4) or not Whether or not inward supply against which ITC availed is used for providing taxable supplies

Scope of GST Audit Verification of Books of Account, return, records documents etc Whether proper Books of Accounts and records are maintained as per provision of Sec-35 read with Rule 56,57,58 Whether Supply has been declared in GSTR-3B, GSTR-1 Whether post supply credit note issued for discount is pre-determined or not Whether or not ITC reversed on goods stolen, destroyed, lost etc Whether E-way generated for movement of goods or not

Tax Invoices, BOS, RCM, (Receipt, Payment, refund) vouchers
Sec-31 read with Rule 46 to 55 Every Registered person shall Issue Tax Invoice before or at the time of removal of goods where movement is required and Delivery or making available the goods Every Registered person shall Issue Tax Invoice before or after the Provision of service Within 30 days of supply of service

Sec-31 read with Rule 46 to 55 A revised Tax Invoice may be issued for supplies made from effective date of regsitration to the date of issue of RC Tax Invoice may not be issued if value of supply is less than 200 Issue Bill of Supply for supply of exempted goods or services Issue Bill of supply for supply of both taxable and exempted supply to a regsieterd person Issue Receipt Voucher on receipt of Advance Refund vouher if no supply is made against advance receive

Sec-31 read with Rule 46 to 55 Issue a invoice on self in case of receipt of goods or services from unregistered person attracting tax u/s 9(3) or 9(4) Issue a payment voucher at the time of payment to supplier whose supply attract RCM u/s 9(3) or 9(4) Issue of Invoice in case of continuous supply Before the date of payment where ascertianble from contract Before or at the time of receipt of payment Completion of an event when payment linked to that When the supply ceases

GSTR-9C-Part-A Communication with other Auditor of Same PAN
Suitable notes about reliance on the financial statement audited by other auditor If unaudited under other law, the same also need to disclosed. Advances against goods received till 15th Nov 2017

CA Bikash Agarwala

Reconciliation of Taxable Turnover (Sl. No. 7)
Annual Turnover after adjustments (from 5P) 7A Less : Exempted, Nil-rated, Non-GST, No-Supply Turnover 7B Zero-rated supplies without payment of tax 7C Outward Supplies under reverse charge (tax payable by recipient) 7D Taxable Turnover [7A-(7B to 7D)] 7E Turnover in 7B, 7C and 7D are to be reported net of credit notes, debit notes and amendments, if any

B.Com,FCA, CS, LLB, DISA(ICAI)

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B.Com,FCA, CS, LLB, DISA(ICAI)

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