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Audits under GST Regime: Are we geared enough to face the challenges

CMA Navneet Kr Jain 
on 10 November 2016

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Though audit is normally linked with accounts but in the context of revenue collection, audit is the backbone in the taxation system to ensure the generation/collection of correct amount of taxes. In the current taxation regime, the audits are conducted by the revenue officials of central and state  governments and by the independent professionals wherever specified.

In the direct taxation i.e. income tax, audit is conducted by the independent professionals and the report is submitted to the department whereas in case of indirect taxes especially no regular audit was  mandated by the central government  in Excise or Service Tax. However, in many cases, the state governments had introduced the system of regular VAT audit.

Keeping in view of the complexities, quantum of assesses, in GST there will be a combination of various audits.

As per the Model law, there will be following  different types of audits

  1. Audit by Tax Authorities
  2. Special Audit by CAs/CMAs
  3. Regular Audit by CAs/CMAs in case the turnover exceeds the specified limit (Presently Rs One Crore)
  4. Audit by CAG teams

It needs mention that GST audits will be conducted at registration level not at company level as of now. If a company is operating in 10 states and have ten different GSTIN numbers, it will have to get the audit conducted for all the registrations separately.

Chart showing the GST Audit categories and details thereof

Audit by Tax Authorities

Special Audit by CAs/CMAs

Regular Audit by CAs/CMAs

Audit by CAG teams. If any

Who Can order the Audit

Commissioner of CGST/Commissioner of SGST or any officer authorised by him

Deputy/Assistant Commissioner with the prior approval of the Commissioner

No need to issue any order, this audit is required to be conducted mandatorily provided the turnover of the assessee exceeds specified limit.

Not specified anywhere but under section 64(2) reference has been made that every person in charge of premises referred to in sub-section (1) shall, on demand, make available to the officer authorized under sub-section (1) or the audit party deputed by the Additional/Joint Commissioner of CGST or SGST or the Comptroller and Auditor General of India or a cost accountant or chartered accountant nominated under section 50, as the case may be

What will be periodicity of the audit

Period will be as decided by the order issuing authority and may be for multiple years

Period will be as decided by the order issuing authority and may be for multiple years

Annual Audit

Who can conduct the audit

CGST and SGST Officers

Cost Accountant/ Chartered Accountant

Cost Accountant/ Chartered Accountant

How much is the time limit for completion of audit/submission of report

Audit should be completed within three months from the commencement of the audit i.e the date on which documents are made available for the audit

Special Audit report is required to be submitted within ninety days

To be filed with annual return by 31st December succeeding the closing of the year

Whether any extension can be granted

Can be extended by a period of maximum six months for the reasons to be recorded or the actual institution of audit at the place of business, whichever is later

Can be extended by a maximum of ninety days for the reasons to be recorded by commissioner

No such provision exists

Payment of fees for audit

Not Applicable

Fee will be determined and paid by the commissioner concerned

Fee will be paid by the company who appoints the auditor

At the end, we can say that there will be robust system of conducting multiple audits wherever required under GST regime but it will definitely ensure better compliance and also help the assesses.

In case of any clarifications, please feel free to contact us at

The author can also be reached at navneetic@yahoo.com


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