Technical Guide on Annual Return & GST Audit

Technical Guide on Annual Return & GST Audit by ICAI

The ICAI has issued the “Technical Guide on Annual Return & GST Audit” to help the chartered accountants. To finish and perform their duties properly as per the GST law for furnishing the annual return & GST audit. 

Introduction to Goods and Services Tax Audit

The Goods and Services Tax regime is revolutionary in commodity and services tax. It has brought about a paradigm shift in the methodology of levy and collection of taxes. It is an internationally recognized multipoint tax system providing for the levy of tax on goods as well as services on the value addition occurring at every stage of business activity. Today, it can be largely said that GST being a self-assessment tax, audit procedures are introduced for ensuring proper compliance.

The audit of accounts in Corporate Sector has been made compulsory by legislation over decades. In addition to the above, the specific legislation governing different types of entities also mandates audit under the respective statutes. Realizing the importance of audit of businesses who are essentially not governed by the Companies Act or any other special statutes, the Income-tax Act introduced audit of businesses who have crossed certain turnover in terms of Section 44AB of Income-tax Act. This has always helped the Government to ensure the statutory compliance under Income Tax.

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Under Central Excise Act, 1944 and Service Tax Laws (vide Finance Act, 1994) special audit was prescribed under Section 14A and 14AA of Central Excise Act, 1944 and section 72A of Finance Act, 1994. The said Special Audit was required to be conducted by a Chartered Accountant or a Cost Accountant in the Special cases where Commissioner of Central Excise had reasons to believe that the credit of duty availed of a utilized under the rules are not within the normal limits or that there is a case of undervaluation. However, there was no general provision for audit by Chartered Accountants based on the turnover limit.

Goods and Services Tax was introduced to consolidate most of the indirect taxes and also to increase the tax base with an emphasis on compliances. At the same time, thrust was given to self-assessment processes whereby the taxpayers are required to assess their tax liability and pay taxes. While doing so considering the challenges which the government may face handling the volume of taxpayers and transactions, technology support is taken completely since the time of introduction.