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GST Audit
A GST audit reviews a business's financial records and transactions to ensure compliance with GST regulations, required for businesses with annual turnover over ₹2 crore. It involves filing GSTR-9 and GSTR-9C to reconcile monthly returns with financial statements. Regular audits prevent penalties and enhance transparency. At Bhanushali & Bhanushali, we help businesses manage GST audits efficiently, ensuring accurate filings and compliance.
Frequently Asked Questions About GST Audit
1. Why is a GST Audit Crucial for Your Business Compliance?
A GST Audit is a thorough review of a business’s financial records and GST returns to ensure compliance with the GST laws. Required for businesses with an annual turnover above ₹2 crore (or as per updated thresholds), it verifies the accuracy of turnover, tax liability, refunds, and Input Tax Credit (ITC). A Chartered Accountant (CA) conducts the audit, identifies discrepancies, reconciles accounts, and ensures all filings align with legal standards, culminating in the filing of GSTR-9C, the reconciliation statement.
2. What is Involved in Reviewing GST Output Liability?
• Verifying taxable turnover, exempt, and zero-rated supplies.
• Checking correct HSN/SAC classifications for goods and services.
• Ensuring accurate GST payment and reporting in GSTR-1 and GSTR-3B.
• Identifying and rectifying discrepancies in tax liabilities.
• Minimizing risks of underpayment or overpayment, ensuring compliance.
3. How is Input Tax Credit (ITC) verified during a GST audit?
Reviewing Input Tax Credit (ITC) ensures compliance and accurate claims. The process includes:
• Verifying eligibility of ITC claims.
• Reconciling ITC between purchase records and GSTR-2A/2B.
• Reversing ineligible ITC on time.
• Excluding blocked credits (e.g., personal expenses, vehicles).
A thorough ITC review minimizes disputes and optimizes cash flow.
4. What Does a GST Compliance Review Cover?
A GST compliance review checks adherence to filing and payment obligations, covering:
• Timely filing of returns (GSTR-1, GSTR-3B, GSTR-9, GSTR-9C).
• On-time tax payments to avoid penalties.
• Proper documentation (invoices, registers, e-way bills).
• Reconciliation of GST returns with financial records.
Regular reviews help businesses stay audit-ready and compliant.
5. How Do Effective Internal Controls Enhance GST Compliance?
Strong internal controls under GST ensure efficient compliance, including:
• Regular transaction checks for accurate reporting.
• Establishing processes for invoices, ITC claims, and tax payments.
• Proper record maintenance (invoices, e-way bills, ledgers) for six years.
• Automating GST tasks to reduce errors.
These controls help businesses streamline audits and minimize compliance risks.
6. What Are the Key Deliverables of a GST Audit?
A GST audit provides actionable insights and ensures legal compliance. Key outcomes include:
• Verifying ITC claims and reversing ineligible claims
• Reviewing output tax liability for accuracy
• Ensuring reconciled return filings like GSTR-9 and GSTR-9C
• Recommending improvements in internal controls and reporting
• Aligning financial statements with GST returns to resolve mismatches.
At Bhanushali & Bhanushali, we provide expert GST audit services to ensure compliance, optimize tax credits, and minimize risks. Let us help you navigate GST regulations with ease. Contact us for customized GST solutions!