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GST audit how? PAN wise/State wise/GSTIN wise

Mukesh Kuriyal 
Updated on 08 April 2020

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Goods & Service Tax Act As Government Declared It To Be Simpler Was Never Simpler And Will Never Be...GSTN Seems To Be Network Of Problems. Nothing Is Clear In Act Every Professional i.e. Advocates/CA's Have Their own Interpretations Whereas Advocates Are Ready to Challenge Every Thing In The Court Similarly Chartered Accountant's Are Trying To Approach To ICAI And The Best Part Is Revenue Officers Are Dumb At Interpretation.

As You All Are Aware that GST Audit For Fin Year 2017-18 Is To be Done by 31st December 2018 But The Basic Points Mentioned Below Are Not Clear.

1. Whether The GST Audit Is To Be Done State Wise Or GST No Wise.

2. Whether The Turnover Means The Turnover Of PAN INDIA Or Turnover Of PAN STATE Or Turnover Of A Particular GSTIN.

Now Lets Go Through GST ACT-2017

Section35(5) :- 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 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.

**Register Person Means A Person Registered Under Section 25 But Does Not Include Person Having U.I.N Number.

Section25(4) :- A Person Who Has Obtained Or Is Required To Obtain More Than One Registration, Whether In One State Or Union Territory Or More Than One State Or Union Territory Shall, In Respect Of Each Such Registration, Be Treated As Distinct Persons For The Purposes Of This Act.

**That Means Every Person Who Has Obtained GSTIN Number Whether The Person/PAN Is Same Shall Be Treated As A Separate Registered Person.

'Aggregate Turnover' 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.

'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.

Does The Prescribed Limit Means Aggregate Turnover Or

Does The Prescribed Limit Means Turnover In State/UT

Case1:  If The Prescribed Limit Means Aggregate Turnover Then It Means That The Registered Person Having Same PAN No But Having More Then One GSTIN No Whether In Same State/Different State Will Have To Get Their Accounts Audited In Similar Manner As Audited In Income tax But The Problem Here Is That Under Which GSTIN Will He Upload The Audit Report.

  1. If A Person Having Same PAN No Is Registered In Uttarakhand (UK) As Well As In Uttar Pradesh(UP) Having Two Separate GSTIN Respectively. The Turnover In UK Is Of 1 Crore Whereas In UP Its 2 Crore Making Aggregate Turnover To 3 Crore Rupees. Suppose He Does The Audit Of 3 Crores And Upload In The GSTIN Of UK Then How Will The UK Officials Match The ITC And Payments Of UP Which The Person Has Filed In The GST Returns Of UP And Moreover How Can The State Officials Reach To The Other State Officials Portal And Why Will They Take The Botheration Of Matching The Data Of Other State Since They Are Restricted Only To The Revenues Of Their Particular State. So This Is Not Possible.
  2. If He Will Have To Upload The Same Audit Report To All His GSTIN Then It Is mere Foolishness And Nothing Which I Don't Expect From Finance Ministry.

Case2: If The Prescribed Limit Means Turnover In State/UT Then It Means That The Registered Person Having Same PAN No But Having More Then One GSTIN No In Same State/Different State Will Have To Get Their Accounts Audited Statewise In Similar Manner As In The VAT Regime But The Problem (a)Here Is That Within A State Under Which GSTIN Will He Upload The Audit Report.(b)The Audit Will be Done Separately StateWise Which Is Unnecessary A Hectic for The Registered Person

  1. If A Person Having Same PAN No Is Registered In Uttarakhand, Uttar Pradesh And Delhi Having Three Separate GSTIN Respectively. The Turnover In Uttarakhand, Uttar Pradesh And Delhi Is Of 1 Crore,2.1 Crore And 3 Crore Respectively Making Aggregate Turnover To 6.1 Crore Rupees. As Per State UK Turnover Is Less Then 2 Crore And Is Therefore Not Liable To Audit Whereas In UP And Delhi The Turnover Is More The 2 Crore In Respective States So Liable To Audit Separately. Here He Will Have To Upload The Audit Report In The Respective State GSTIN. This Is Also Tedious Job Since Many People Have Taken Registration In All The States.
  2. If A Person Is Having Multiple Registration In Any State Suppose A Person Is Having 4 Separate Registration (4 GSTIN No's) In Uttarakhand i.e. In Dehradun, Nainital, Tehri And Pauri Districts. The Turnover Is 1 Crore,1.1 Crores,2.1 Crores And 1.5 Crores Respectively Making Aggregate Turnover To 5.7 Crore. Suppose He Does The Audit Of 5.7 Crore And Upload IN The GSTIN Of Dehradun District Then How Will The Officials Verify The Payment Of 4.7 Crores Which Are From Other Districts Or Other GSTIN No. So This Also Doesn't Seem Is Not Possible .It Can Be Possible Only If Technically They can Merge The Data Of All GSTIN Having Same PAN Number In A State Which Can Easily Be Done But Will The GSTIN Do That.

From All The Above Situation I Personally Feel That GST Audit Can Neither Be Done PAN Wise Nor State Wise It Will Have To Be Done According To GSTIN Wise Where Turnover Of That GSTIN Is Greater Then Two Crores.

That Is Why I Recommended For Not Taking Separate Registration State Wise In My Article 'No Separate Registration For Companies Providing Works Contract Services' .Today All The Clients Whom I Recommended Single Registration Are Happy Since They Are Not Falling In Any Of The Cases Discussed Above And Are Liable To Get Audited Only For That GSTIN (If Beyond The Limit).

The GST Council Or The Govt. Should Make It Clear.


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