What we do
Our work in this practice group is structured around the records, deadlines, and decisions involved:
- Independent review of GST records and compliance processes.
- Reconciliation of GST returns with books of account.
- Detailed review of input tax credit and related documentation.
- Identification of tax liability differences and reporting errors.
- Detection of discrepancies between invoices, returns, e-invoices, and e-way bills.
- Early identification of potential GST compliance risks and liabilities.
- Practical recommendations for improving GST processes and controls.
How the engagement works
GST audit and reconciliation requirements are governed by the applicable provisions of the Central Goods and Services Tax Act, 2017, corresponding State or Union Territory GST laws, GST Rules, notifications, circulars, and applicable procedures. The statutory requirement for annual returns, reconciliation statements, audit, certification, and related reporting may vary based on the taxpayer’s category, turnover, and the provisions applicable for the relevant financial year. The exact scope and reporting requirements should therefore be evaluated based on the taxpayer’s circumstances and the law applicable for the relevant period.
Scenario 1: A business wants an independent review of its GST compliance before completing annual GST return requirements.
Scenario 2: A company has differences between its books of account and GST returns and requires detailed reconciliation.
Scenario 3: A business wants to verify whether input tax credit has been correctly claimed, reversed, and reported.
Scenario 4: Management wants to identify potential GST liabilities arising from incorrect tax rates, classification, omissions, or reporting differences.
Scenario 5: A taxpayer wants a comprehensive GST compliance review before facing a departmental scrutiny, audit, or other GST proceeding.
GST Compliance Review
We review the taxpayer’s GST registration, business activities, returns, accounting records, invoices, and compliance processes to identify significant risk areas.
Books & GST Return Reconciliation
We reconcile books of account with GST returns and analyze differences in turnover, outward supplies, tax liability, and other reported information.
Input Tax Credit Audit
We review input tax credit claimed in GST returns against purchase records and available supporting information and identify potential ineligible, excess, or unmatched credit.
Tax Liability Verification
We examine applicable GST rates, taxability, reverse charge transactions, exemptions, credit notes, debit notes, and other factors affecting GST liability.
Invoice & Transaction Testing
We review selected invoices and transactions to assess GST classification, tax rates, documentation, place of supply, and other relevant compliance matters.
Audit Findings & Reporting
We document significant discrepancies, potential liabilities, control weaknesses, and compliance observations and provide practical recommendations for corrective action.
Specialized Audit & Amnesty Review
We review deemed supplies such as corporate guarantees (Schedule I), and evaluate taxpayer eligibility for statutory interest and penalty waiver schemes (such as Section 128A amnesty) for past disputed periods.
Step-by-step process
Step 1: GST Profile & Risk Assessment
We understand the taxpayer’s business activities, GST registrations, transaction volumes, return filing process, accounting systems, and key compliance risk areas.
Step 2: Books & GST Data Collection
We collect GST returns, financial statements, trial balance, sales and purchase records, input tax credit data, invoices, tax payment details, and other relevant records.
Step 3: Reconciliation & Verification
We reconcile books with GST returns and verify turnover, tax liability, input tax credit, invoices, and other relevant GST transactions.
Step 4: Discrepancy & Compliance Analysis
We identify reporting differences, potential tax liabilities, input tax credit issues, classification errors, documentation gaps, and other compliance observations.
Step 5: Reporting & Corrective Guidance
We present significant findings to management and provide practical recommendations for correcting discrepancies and strengthening ongoing GST compliance.
Key deliverables & outputs
General questions
01What is a GST audit?
A GST audit is a detailed examination of a taxpayer’s GST records, books of account, returns, transactions, input tax credit, and tax liability to assess the accuracy and completeness of GST compliance.
02Who should get a GST audit done?
The need for a GST audit or detailed GST compliance review depends on the taxpayer’s statutory requirements, turnover, business activities, and the provisions applicable for the relevant financial year. Even where a specific statutory audit requirement does not apply, a voluntary GST compliance review can help identify potential errors and risks.
03What is checked during a GST audit?
The review may cover sales and purchase transactions, GST returns, books of account, tax rates, input tax credit, reverse charge, credit and debit notes, e-invoices, e-way bills, tax payments, and other GST-related records.
04Why is GST reconciliation important?
GST reconciliation helps identify differences between accounting records and GST returns, including turnover mismatches, tax liability differences, input tax credit issues, timing differences, and reporting errors.
05Can a GST audit identify additional tax liability?
Yes. A detailed review may identify under-reported taxable supplies, incorrect tax rates, excess input tax credit, reverse charge issues, or other matters that could result in additional GST liability.
06Can you help with GSTR-9 and GSTR-9C after the GST audit?
Yes. Where applicable, we can coordinate the GST audit or compliance review with annual GST return preparation, reconciliation, and GSTR-9C-related requirements.
07Can a GST audit help prevent GST notices?
A proactive GST audit cannot guarantee that a notice will not be issued, but it can help identify and address discrepancies before they develop into larger compliance issues or departmental proceedings.