GST Audit Services In Mumbai

Are you looking for the best audit service in Mumbai? You are in the right place. Anam Shaikh & Associates is a Mumbai-based audit firm known for its expertise in auditing, assurance services, and internal audit. 

With over 8 years of experience, Anam Shaikh & Associates provides a comprehensive GST audit service, enabling businesses to ensure GST compliance, identify discrepancies in tax filings, optimize tax liabilities, and avoid penalties.

Let’s explore the detailed overview of the GST audit in Mumbai and the objectives, types, documentation, and penalties to enable you to make an informed decision about your business GST audit.

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What is GST Audit Services?

Audit under GST is a process that examines records, returns, and other documents maintained by a taxable person to verify the correctness of turnover declared, taxes paid, refund claimed, and input tax credit availed and assess compliance with GST provisions. It is not only for reconciling tax liability and payment but also for verifying GST laws' compliance and educating taxpayers to be more compliant with the law and procedure.

Renowned GST audit services like Anam Shaikh & Associates help you maintain these records properly, ensuring compliance with GST laws and providing peace of mind by minimising the risk of errors, penalties, and non-compliance issues.

Why Choose Anam Shaikh & Associates?

Anam Shaikh & Associates is today recognized as one of the respected firms in its area of practice. Our focus is on high-end consultancy. Our personal contribution to the assignments is very high. We are ably supported by the staff in the legal research and compliance activities of the firm.

We advise on Direct Taxation as well as Indirect Taxation & also involved in Auditing Services, Incorporation, and Registration Services & Accounting. Our focus is to provide clients with expert advice on the above areas. Our unique advisory style provides clients with legal advice in a simple yet exhaustive manner.

What Are the Different Types of GST Audit?

GST Audit Services

 Mandatory GST Audit

Section 35(5) of GST Audit rules mandates that registered taxpayers with a yearly turnover of Rs. 5 crores must have their books of account and returns auditedon self certification basis. A certified copy of these audited accounts and reconciliation statements must be provided in form GSTR 9C through facilitation centers, making it one of the types of GST audit. The taxpayer must submit GSTR-9C, including an audit report and reconciliation statement, to align reported figures with actual financial records.

General Audit

GST authorities conduct a General Audit to ensure compliance with GST regulations. The audit starts with a formal notification to taxpayers 15 days before the audit date. Auditors for GST review all relevant documentation, including tax returns and financial records, to assess compliance.

Special Audit (By Tax Authorities)

The GST Audit Rules allow authorised officers for scrutiny, inquiry, or investigation stages. The officer can assess the business’s complexity to determine if the value is incorrectly declared or if credit is not within the normal GST audit limit. The commissioner pays for these special audits and records returns, with an additional 90-day extension for auditing periods. The audit results are communicated to the auditee in Form GST ADT-04.

What Are the Objectives of GST Audit in India?

Objectives of GST

The objectives of a GST audit in India are to examine records, returns, and other documents maintained or furnished under GST law to verify the correctness of turnover declared, taxes paid, refund claimed, and input tax credit availed.

When Are GST Audits Required?

GST audits are required for registered taxpayers with an annual turnover exceeding Rs.5 crore in a financial year, which covers the 12-month period from April to March of the following year, under Section 35(5) of the CGST Act.

What Process Is Involved in the GST Audit?

The GST audit process verifies a taxpayer’s financial records, tax returns, and documents to ensure GST compliance. It examines invoices, checks turnover declarations, taxes paid, input tax credits claimed, and refund claims, and reconciles GST returns with financial statements. A report is prepared, and discrepancies are suggested for corrective actions.

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What Are the Offences and Penalties Under GST for GSTR 9?

S.No

Turnover limit

Late fee per day

Maximum late fee

1

Up to Rs.5 crore

Rs.50 (Rs.25 each under CGST and SGST Act) 

0.04% of turnover in state/UT (0.02% each under CGST and SGST Act)

2

More than Rs.5 crore and less than Rs.20 crore

Rs.100 (Rs.50 each under CGST and SGST Act) 

0.04% of turnover in state/UT (0.02% each under CGST and SGST Act)

3

More than Rs.20 crore

Rs.200 (Rs.100 each under CGST and SGST Act) 

0.50% of turnover in state/UT (0.25% each under CGST and SGST Act)

What Is the Checklist for GST Audit?

What is the checklist for GST Audit

Here are the following involved in the GST Audit checklist

Registration Certificate

The GST registration process involves assessing the client’s registrations, verifying the accuracy of information, examining casual registrations, and ensuring the GSTIN/Registration Certificate is prominently displayed at specified locations. It also checks if the client has received any Input Service Distributor (ISD) registration, ensuring compliance with GST and tax regulations. 

Invoicing and Related Documentations

It involves verifying GST compliance for tax invoices, bills of supply, and credit/debit notes, ensuring accurate details, timely issuance of services invoices, and proper reporting of credit notes, revised invoices, and advance receipts in GST returns. It also involves maintaining e-waybill and delivery challan registers, matching taxable values, and ensuring document series align with GST returns. 

Supply

The GST audit checklist involves classifying supplies as taxable, exempted, or nil-rated, reviewing transactions to ensure they fall within supply scope, verifying interstate and intrastate supplies, and confirming the validity of Letter of Undertaking for suppliers to Special Economic Zones (SEZ) or For Export out of India. It also ensures accurate application of tax rates for composite and mixed supplies and correct tax treatment for receipt vouchers when uncertain supply places are present. 

Time of Supply

The GST audit checklist ensures compliance with inward supplies rules, correct documentation for goods sent on sale or approval, and adherence to Time of Supply provisions when issuing tax invoices for goods or services. It also checks if vouchers align with the time of supply regulations to ensure timely tax compliance. The audit also checks adherence to time of supply provisions for continuous supplies. 

Input Tax Credit

The GST audit checklist ensures that Input Tax Credit (ITC) is claimed only upon receipt of goods or services, based on original invoices, and correctly reflected in GSTR-3B. It ensures eligibility, proper reversal in exempt supplies or capital goods sales, checks for unpaid invoices over 180 days, verifies correct documentation from suppliers, matches GSTR-2A with the purchase register, accounts transitional and blocked credits, confirms ITC on capital goods purchases, and compliance with GSTIN requirements. 

Classifications

The GST audit checklist ensures accurate classification of goods and services according to the Customs Tariff Act and Notification No. 11 of Central Taxes, dated June 28, 2017. It ensures compliance with tax rates and confirms the client’s identification of the HSN code. The audit also checks if any advance rulings have been filed and provides the HSN code in the item master is up-to-date. 

Input Service Distributor

The GST audit checklist for Input Tax Service Distributors involves verifying if the client has registered as an ISD, ensuring returns are filed within specified timelines. It also consists in confirming accurate credit distribution by GST provisions and ensuring proper issuance of tax invoices for credit distribution. It also checks if ineligible credit has been distributed and takes corrective action if necessary. 

Returns

The GST audit checklist ensures timely filing of returns, accurate late fee payment, alignment of liability in GSTR-3B with GSTR-1 and sales register, and checks for interest payments on delayed payments. It also checks if GSTR-1’s liability aligns with GSTR-9’s and ensures accurate re-invoicing of amendments to invoices in both GSTR-1 and GSTR-3B, where applicable. 

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GST Collections and Payments

The GST collections and payment verification checklist ensures GST liability settlement within the prescribed time frame and interest payment for delayed tax payments, following Section 50. It provides tax collected does not exceed the recipient tax payable and tax liability is discharged correctly. If incorrectly discharged, audits assess refund claims or adjustments. The Liability register should be updated with tax payable and paid amounts, ensuring accurate tax collection and payment verification. 

Reverse Charge

The checklist for reverse charge includes verifying that reverse charge tax has been paid by Section 9(4) of the CGST Act 2017, and confirming that taxes have been paid for notified supplies under Section 9(3) and 9(5) of the CGST Act 2017. It also checks if all conditions for reverse charge are met and if payment vouchers have been issued for reverse charge payments. The audit should verify that all payments are eligible for input tax credit.

Value of Supply

The checklist for determining supply value includes ensuring compliance with Section 15, reviewing post-supply discounts, and assessing GST implications if not documented in sales agreements or contracts. It also evaluates internal valuation processes and pricing methodology for branch transfers and ensures all taxes and levies are properly included. It checks for agreements involving pure agents to verify compliance with legal provisions and ensures accurate valuation of goods or services. 

Place of Supply

The checklist for place of supply ensures accurate determination of the place of supply for inter and intra-state transactions by the IGST Act. It checks if conditions are met for exporting goods or services and ensures compliance with import provisions. The audit also assesses zero-rated supplies and high-sea sales, confirms if clients engage in intermediary supplies under GST, and ensures the location of suppliers and recipients are met for accurate place of supply, including supplies made to SEZ/SEZ developers. 

Refunds

The checklist for GST refunds involves verifying client eligibility, processing refund applications, and ensuring compliance with GST provisions. It identifies discrepancies between claimed and sanctioned refund amounts and investigates the reasons behind them. It also ensures correct refund credit to the electronic credit ledger, checks submitted documents and investigates rejections. The audit also ensures accurate accounting entries for claimed and received refunds, and checks for delays in processing, ensuring interest is credited for delayed refunds. 

Inward Supplies

The checklist for inward supplies ensures that input tax credit (ITC) is claimed only after receiving goods or services based on the original tax invoice. It confirms eligibility of claimed ITC, accurately reflects ITC in GSTR-3B, and ensures proper accounting for inputs, services, and capital goods. It also checks for reversal of ITC in non-payment or improper documentation, matches GSTR-2A with the purchase register, and prevents ITC from being claimed on blocked credits. 

Maintenance of Books of Accounts

The checklist for maintaining books of accounts involves verifying their location at the principal place of business and ensuring GST compliance. It checks for separate accounts for received and paid advances, complete records for suppliers and customers, and proper records for appointed agents. The audit also confirms the existence of a production, stock, purchase, and sales register, confirms if a cash/bank register is maintained, determines if the books are centralised or decentralised, and verifies if accounts are maintained separately for each registration. 

General

The checklist ensures GST compliance in all transactions, timely return filing, accurate record-keeping, proper documentation, and adherence to tax rates and classifications. It also meets conditions for exemptions, refunds,  input tax credits and completes necessary amendments.

What Are the Records Examined by a GST Auditor?

Register of Outwars Supplies

An auditor for GST examines records related to outward supplies, including sales, transfers, barters, exchanges, leases, and other business transactions. This ensures accurate reporting of all types of sales and the correct application of GST. The auditor verifies the supporting documentation and checks for compliance with GST regulations. The audit ensures that the outward supply transactions are appropriately accounted for and taxed.

Register of Inward Supplies

The register of inward supplies is a record that tracks the receipt of goods and services, ensuring accurate documentation of all purchases. The GST auditor reviews this register to verify the correct reporting of input tax credits and compliance with GST regulations, ensuring all inward supplies are properly recorded and taxed.

Inventory Register

The inventory register is a crucial tool for businesses, recording details of goods, including stock levels, purchases, and sales, to track movement and ensure accurate GST reporting. A GST auditor reviews it to verify inventory quantities and assess outward and inward supplies, ensuring GST compliance and precise tax filings.

Ledgers of Expenses

GST auditors review expense ledgers to ensure proper categorization and accurate reporting of business-related expenses, including purchases and operational costs. This helps verify GST compliance and provides accurate reporting in taxable expenditures, making proper documentation crucial for maintaining GST compliance.

Register of Input Tax Credits

The register of input tax credits records GST paid on business purchases and eligible expenses. An auditor for GST  reviews this register to verify compliance with regulations and ensure correct credits are awarded. Proper documentation is crucial to avoid errors or disallowances during the audit.

ITC Claimed and Utilized

The register of input tax credits (ITC) claimed and utilized by a business tracks the amount used to offset output tax liability. A GST auditor reviews this register to verify these credits’ validity and proper usage, ensuring GST compliance, avoiding penalties and preventing excess or improper claims.

GST Payables and Actual Payments

The GST payables and actual payments register are crucial for businesses to track their GST liabilities and payments. It is reviewed by a GST auditor to ensure accurate calculations and timely payments, thereby confirming compliance with GST laws and ensuring the business’s tax obligations are up-to-date. Proper documentation is crucial to avoid discrepancies during audits.

Generation of E-Way Bills

The register for generating e-way bills tracks all goods movement transactions, with a GST auditor reviewing it to ensure compliance with GST rules. Accurate e-way bill records are crucial for avoiding penalties and smooth business operations, as they verify accurate reporting of goods in transit and ensure all necessary documentation is in place.

What Is the Penalty for Not Filing a GST Audit Report?

Audit Under GST

The penalty for not filing a GST audit report can be Rs. 25,000. Additional fines may apply for continuous non-compliance. Timely submission of the audit report is essential to avoid such penalties.

Documents Required for Audit Under GST

The GST audit documentation includes:

  • Offer Letter
  • Engagement Letter
  • Audit Plan, audit programmed, detailed checklist, invoices, and representation letters 
  • GST return, tax paid, credit availed, sales made, important matters identified during the audit, and deficiencies in internal controls
  • Risk assessment procedure, sufficient audit evidence, and all electronic working papers in Excel, CSV, PDF, JPEG, and JSON formats. 

These documents are crucial for effective management and compliance with GST regulations.

Looking for Top GST Audit Firms in Mumbai? Fill out the Form to Find the Best Options for Your Needs

Looking for top GST audit firms in Mumbai? Fill out the form to discover the best options tailored to your needs. Anam Shaikh & Associates is the best CA for GST audit in Mumbai. Their expertise ensures accurate compliance and thorough audit procedures. Contact them today to streamline your GST audit process!

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Conclusion

In conclusion, Anam Shaikh & Associates provides expert GST audit services in Mumbai, ensuring compliance with GST regulations. With over 8 years of experience, they help businesses avoid penalties, identify discrepancies, and optimize tax liabilities. Their comprehensive audit process covers documentation and risk assessment, making them a trusted partner and the best GST audit limit for service provider

in Mumbai.

Frequently Asked Questions

An audit under GST is a process that examines records, returns, and documents maintained by a GST-registered person to ensure the correctness of turnover declared, taxes paid, refunds claimed, and input tax credits availed. It is a trust-based taxation regime where taxpayers self-assess their tax liability, pay taxes, and file returns.

The GST audit in India aims to securitise tax returns, financial records, and other documents, ensure compliance with GST laws, verify the accuracy of claimed refunds, declared turnover, input tax credit, and paid taxes, and verify the correctness of input tax credit availed, which must be compliant with the GST Act, 2017.

A GST audit is mandatory for registered taxpayers with an annual turnover exceeding Rs. 5 crores. They must have their books audited by an authorized Chartered Accountant, Cost Accountant, or Certified Management Accountant.

There are three types of GST audits:

  • Mandatory GST Audit 
  • General Audit
  • Special Audit (By Tax Authorities)