Whether GST Audit applicable to Government Companies?


Whether GST Audit applicable to Government Companies?

As per Section 35(5) of CGST (Central Goods and Service Tax) Act 2017, every registered person whose turnover during a financial year exceeds Rs 2 crores shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts and the reconciliation statement under section 44(2) and such other documents duly certified in form FORM GSTR-9C.

Section 44(2) of CGST Act 2017

As per every Section 44(2) of CGST Act 2017, registered person who is required to get his accounts audited in accordance with the provisions section 35(5) shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement.

Recently a proviso in section 35(5) has been inserted by Central Goods and Services Tax (Amendment) Bill, 2018,

 “that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”

Government Company means any company in which not less than 51% of the paid-up share capital is held by:-

1)    The Central Government, or

2)    Any State Government or Governments, or

3)    Partly by the Central Government and partly by one or more State Governments, or

4)    includes a Company which is a Subsidiary Company of such a Government Company (such subsidiary company may be private Limited company as well as public limited company)

As per section 139 of Companies Act 2013, Government companies are required to be audited by Comptroller and Auditor-General of India, so they are exempt from audit requirement under section 35(5) of CGST Act 2017.


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