who is liable to get his accounts to be audited?

Audit by a Chartered Accountant or a Cost Accountant –  Section 35(5) of the CGST Act/ SGST Act read with Rule 80(3) of the CGST/SGST Rules, 2017

Every registered person whose turnover during a financial year exceeds the prescribed limit of Rs. 2 Crore shall get his accounts audited by a Chartered Accountant or a Cost Accountant.

It is to be noted very carefully here that though in Section 35(5) the term “turnover” has been used, yet it shall mean “aggregate turnover”.

GST AUDIT - Section 2(13):

It is an examination of records, returns and other documents maintained by the registered person under this Act 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; COMPULSORY AUDIT OF GST – SECTION 35(5):

• Every registered person

• Whose turnover during a financial year exceeds Rs. 2 crores

• Gets his accounts audited by a CA or CWA ANNUAL RETURN (GSTR 9C) SECTION - 44(2)

GSTR 9 should be filed by the regular taxpayers filing GSTR 1, 2, & 3 whereas, the registered person who is liable to get their accounts audited under this act shall file return in form GSTR 9C. along with:

• Copy of audited annual accounts and

• Reconciliation statement of tax already paid and tax payable as per audited accounts.

PENALTY:

1. In case of failure to file annual return: Rs. 100 per day per act subject to a maximum of 0.25% of state turnover.

2. In case of failure to get accounts audited from CA: upto Rs. 25,000/-