Check List for GST Audit

GST Audit Report, GSTR – 9C is required to be filed by all the taxpayers who has crossed the turnover of Rs 200 lacs during the year, Being the first year of GST and the implemented from the middle of the Financial year in 2017-18, there is a confusion for determining the turnover to be considered. Should be it for the complete financial year or from 1st of July 2017, the rollout date of GST. We would recommend to go for the complete year as there is no official communication in this matter. Check List for GST Audit 

Circular No. 90/09/2019-GST

This was the point i am discussing with my friends and during my sessions of GST Audit that if the provisions of Rule 46 are not followed then penal provisions can be levied under Section 122 and Section 125. Rule 46 clearly states that on a tax invoice, the bare minimum details have to be shown and if any of the same are missing then 1st proviso of Section 122 can be enforced on the taxpayer which clearly states that penalty of Rs 10,000 per invoice. Refer to Section 122(1) (ii) talks about per invoice, so imagine if the department wants to issue notice for levy of penalty they can issue it per document which is not meeting the said provisions.

Now the same is officially clarified in the Circular #90/09/2019-GST

GST Audit report being prepared should cover this point also, so you can imagine the complexity, quantum of work involved and also the depth of knowledge required to execute it.

Input Tax Credit Utilization

Changes have been announced in the input tax credit utilization in the GST and now the taxpayers have to first utilize the input tax credit of IGST and then only utilize the other taxes input for offsetting the various tax liabilities in GST.

These changes are announced in the CGST Amendment Act 2018.

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FAQ – 19

What are the transactions i need to show in the Point F of Part II of FORM GSTR – 9C, “Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST” ?

There could be some business cases where the discount being offered is not know at the time of supply or the discount could not be established to particular invoices or input tax credit is not reversed on the trade discount offered or it is not mentioned on the tax invoice. In all the above cases, the trade discount will be part of the financial statements but not part of the GST Returns.

FAQ – 18

In From GSTR – 9C, what is “Adjustments in turnover due to foreign exchange fluctuations” and in which cases do i need to fill it?

It has to be filled by all taxpayers who have outward supplies in foreign currency and where they issue a tax invoice as well as a commercial invoice. It can be in case of exporters or supplies to SEZ’s where they issue a tax invoice with payment of duty i.e as per the GST at the time of removal of goods and for the foreign customer, a commercial invoice is issued on a subsequent date. The different dates can some time result in different exchange rates being used. This could cause a difference reported in the financial statements and in the GST Returns, for this reason, it has to be mentioned in the Form GSTR – 9C.

For previous FAQ’s click here

 

FAQ – 17

What are the various reasons where the GST Liability as per financial statements and GST Returns could be different?

There could a difference due to the following reasons commonly

a) Revenue Recognition

b) Stock Transfer outside the states

c) Advance Receipt from customers

d) GST on paid on job work if not returned in stipulated time

e) Reverse charge on certain goods on outward supplies

f) Reverse charge on inward supplies paid

FAQ – 16

Is it Mandatory to fill all the columns in Table 4 (Outward Supplies) ? How do I show data in Table 4 of the GSTR – 9 (Annual Return)?

Yes, it is mandatory to fill all the columns of Table 4 if the same is reported in the monthly returns. The break up can be derived from the Ledger Accounts / Chart of accounts if implemented or can be derived from the monthly returns filed from July 2017 to March 2018.