Conducting GST Audit – Checklist

Conducting GST Audit – Checklist

GST registration certificate, verification of invoice prepared under GST law, input tax credit availed as per GST law and job work transaction, to be taken care of while conducting the GST Audit .

GST Registration Certificate –

Generally, it is assumed by the auditor that the GST registration certificate is okay and most of the auditors generally does not verify the same, however, it is most important to check and verify all the details specified in the GST registration certificate.

Detail Analysis of Particulars of Invoice Documents –

Another important part to be analyzed by the auditor is invoicing under GST.

Following are the crucial points which one needs to keep in mind –

GST Invoice having all the particulars as prescribed under rule 46 of the Central Goods and Service Tax Rules, 2017. It is important to verify that the invoice number reflected in the tax invoice is as per rule 46(b) of the Central Goods and Service Tax Rules, 2017.

HSN Code has been mentioned in the GST Invoice as per the following specification provided vide notification no. 12/2017 – CT dated 28th June 2017 –

Sr. No. Annual turnover in the preceding financial year Number of digits of HSN code to be mentioned in the tax invoice
1 Up to 1.50 Crore NIL
2 1.50 Crore to 5 Crores 2
3 Above 5 Crores 4

Verification of time of issuance of tax invoice needs to be done.

Following are the rules for the same –

In Case of Supply of Goods

1. On or before the date of removal, in the case of actual movement of goods.

2. In the case where GST is payable on a reverse charge basis, on receipt of such goods.

In Case of Supply of Services

1. Within a period of 30 days from the date of supply of service.

2. In case of continuous supply, where the due date can be ascertained, 30 days from the due date.

3. In case of continuous supply, where the due date cannot be ascertained, 30 days from the date of actual payment.

4. When there is the cessation of supply before the expiry of the contract, at the time of such cessation.

5. In the case of banking and other financial institutions, the due date will be 45 days

It should be checked that the debit and credit note, if applicable, has been issued as per the GST law.
If the issuance of the bill of supply is applicable the same needs to be checked.
Correct Availment Of Input Tax Credit

After GST registration certificate and invoicing, the next most important point is to verify the input tax credit availed during the specified period. Following are some of the important points which need to be verified –

GST Audit

Invoice particulars on the basis of which input tax credit has been availed.

Verification of input tax credit availed as per books of accounts against the input tax credit reflected in the GST returns.

Going through the applicability of list of the restricted tax credit as per GST law.

Verification of reversal entries, if any, in the input tax credit.

Verification Of Job-work Transactions –

It must be verified that the goods have been sent to a job-work under the cover of delivery challan.
In case of a job-work transaction, the registered person is required to file FORM ITC 04 on a quarterly basis, and filing of the same needs to be confirmed.

The return date of the goods from the job-work needs to be checked in order to confirm that the same has been received back in time.

GST Returns –

GST monthly / quarterly returns, as applicable, should be verified and confirmed that the same is duly filed as per GST law.

Figures reflected in the respective returns should be verified with the books of accounts and any difference in the same should be reconciled.

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