GST Audit Checklist

Particulars

Remark

Registration & Basic Profile

• Verify GST registration details (legal name, trade name, address, nature of business).
• Check additional places of business and branch registrations.
• Verify amendments made during the year (timely filing).
• Check cancellation/suspension, if any, and its impact.

Applicability of E-Invoice

Check the compliance

Applicability of E-Way Bill

Check the compliance

Outward Supplies / Income Side

• Verify whether GST is correctly paid on all taxable income.
• Classification of supplies: taxable, zero-rated, exempt, NIL-rated, non-GST.
• Verify the correct GST rate, HSN/SAC and place of supply.
• Check advances received and GST liability (especially for services).

Exempt / Nil-Rated / Non-GST Supplies

Identify exempt, nil-rated and non-GST supplies.

ITC reversal under Rule 42 & Rule 43 correctly computed and reversed.

Export & Zero-Rated Supplies

Export with payment of tax - refund correctness.

Export without payment of tax:

• • LUT validity and LUT date prior to date of export (Rule 96A).
• • Realisation of export proceeds within the prescribed time (Rule 96A).

Inward Supplies / Expenses Side

Verify ITC availed with books vs GSTR-2B.

Compliance with Section 16(2) conditions:

• • Tax invoice available
• • Goods/services received
• • Tax paid by the supplier
• • Return filed

Time limit under Section 16(4) - ITC not claimed beyond statutory limit.

Check ineligible ITC reversed correctly (Section 17(5)).

Verify capitalization vs revenue expenses impact on ITC.

Check RCM liability on notified services and supplies.

Verify timely payment of RCM and ITC availment thereafter.

Creditors & Payments

180 days payment condition: ITC reversal for non-payment to vendors.

Re-availment of ITC on subsequent payment.

Check GST implication on advances received for services (GST paid on advance?).

Capital Goods / Fixed Assets

Sale of Fixed Assets:

• • Check whether GST paid on transaction value OR
• • ITC reversed as per applicable provisions.

Investments & Other Income

• ITC reversal on sale of shares, mutual funds, securities. The value of security shall be taken as 1% of the sale value of such security (Explanation to Rule 45).
• Interest income treatment and related ITC impact. For the purpose of Rule 42 & Rule 43, interest on loan or FD will be excluded from exempted income (except Bank, FI & NBFC) as per Explanation 1(b) of Rule 43.

Utilisation & Payment of Tax

Rule 86B applicability - minimum 1% cash payment compliance.

Job Work Transactions

Movement of goods under job work challans.

Timely return of goods from job worker:

• Input goods: within one year
• Capital goods: within three years. 

If the goods are not returned within the specified time frame, it is treated as a deemed supply by the principal to the job worker on the date the goods were originally sent out.

TDS / TCS under GST

• Applicability of GST TDS / TCS provisions.
• Reconciliation with GSTR-7 / GSTR-8.
• Timely deduction/collection and deposit.
• Credit reflected in electronic cash ledger.

Branch Transfers / Related Party Transactions

• Supplies between distinct persons.
• Valuation as per GST rules.
• ITC availment by recipient branch.
• Proper invoicing and tax payment.

Sale on Approval Basis

Identification of goods sent on approval.

Time limit for return of goods.Tax liability if goods not returned within prescribed period.Deemed supply if goods not returned within 6 months and GST becomes payable.