GST audit provides an opportunity to the industry to carry out the introspection exercise

The GST laws provide for a mandatory audit to be undertaken by every registered person whose aggregate turnover during a financial year exceeds Rs. 2 crore.

The audit is required to be carried out by a chartered accountant or a cost accountant, who is required to certify

“whether in his opinion and to the best of his information and according to examination of books of account including other relevant documents and explanations given to him, the particulars given in the said form No.9C are true and correct subject to observations/ qualifications, if any”.

To this end, form GSTR-9C has been notified which requires reconciliations to be done for taxable turnover, input tax credit and tax paid. Another requirement by the corporates is that of filing of annual return in form GSTR-9.

With the government’s increased focus on tax compliance and the exhaustive reporting that is required of corporates, it is not going to be an easy task going forward. There is clearly a need to look back and do a detailed introspection on what was done in the last year, and what improvements need to be carried out to ensure that companies do not end up being non-compliant or struggling to obtain data that is required to be reported.

Taxpayer can take the GST Audit in true spirit. It provides an opportunity to the industry to carry out the introspection exercise. While one approach to look at the GST audit is that it is a statutory requirement along the lines of the erstwhile VAT audit, and what is asked of the auditors is merely a certification of mathematical accuracy, would it not be wiser to look at this as an opportunity to carry out a review of what has been done over the past year, instead of merely considering it as ‘one more compliance’?

Same view need to be adopted by the audited while carrying out audit under Income Tax Act 1961,  under the Companies Act 2013 and under various other statutes.