Audit under GST is the process of examination of records, returns and other documents maintained by a taxable person. The purpose is to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess the compliance with the provisions of GST.
“Audit” has been defined in section 2(13) of the CGST Act, 2017 and it means the examination of records, returns and other documents maintained or furnished by the registered person under the GST Acts or the rules made there under or under any other law for the time being in force 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 the GST Acts or the rules made the render.
The Commissioner of CGST/SGST (or any officer authorized by him) may conduct audit of a taxpayer. The frequency and manner of audit will be prescribed later.
A notice will be sent to the auditee at least 15 days before.
The audit will be completed within 3 months from date of commencement of the audit.
The Commissioner can extend the audit period for a further six months with reasons recorded in writing.
The taxable person will be required to:
Provide the necessary facility to verify the books of account/other documents as required
To give information and assistance for timely completion of the audit.
On conclusion of an audit, the officer will inform the taxable person within 30 days of:
Their reasons, and
the taxable person’s rights and obligations
If the audit results in detection of unpaid/shortpaid tax or wrong refund or wrong input tax credit availed, then demand and recovery actions will be initiated.