The Goods and Services Tax ( GST ) Act mandates the filing of Audit Report within 31st December of every year.
Since GST is a trust-based taxation regime, the assessee is required to self-assess his returns and determine tax liability without any intervention by the tax official. Therefore a tax regime that relies on self-assessment has to put in place a robust audit mechanism to measure and ensure compliance of the provisions of law by the taxable person.
Under the GST laws, there are three types of Audit. i.e, (i) the audit is by a chartered accountant or a cost accountant, (ii) Normal Audit and (iii) Special Audit.
In the first category, every registered person whose aggregate turnover during a financial year exceeds two crore rupees has to get his accounts audited by a chartered accountant or a cost accountant and furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C.
In the second type, the Commissioner or any officer authorized by him can undertake the audit of any registered person for such period, at such frequency and in such manner as may be prescribed.
The third type of audit is called the Special Audit. In Special Audit the registered person can be directed to get his records including books of account examined and audited by a chartered accountant or a cost accountant during any stage of scrutiny, inquiry, investigation or any other proceedings; depending upon the complexity of the case.
In the first category of the audit, the government has introduced different types of annual return for regular and composition taxpayers. GSTR-9 is used for regular taxpayers and GSTR-9A for composition scheme. All the taxpayers registered under GST except input service distributors, casual taxable persons, non-resident taxable persons, and persons liable to deduct tax at source, and are required to file the annual returns.
GSTR-9 is prepared based on the earlier process of filling GSTR-1, GSTR-2, and GSTR-3. In GSTR-2, there was a requirement to report details of HSN wise summary of inward supplies. However, as GSTR-2 was not required to be filed till now, one will have to carry out an additional exercise to identify and report HSN wise summary from the books of accounts.
As per section 35(5) of CGST Act, every registered person whose turnover during the financial year exceeds prescribed limit (Rs. 2 cr.) shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 which is called GSTR-9C and such other documents in such form and manner as may be prescribed. Hence, the requirement of GST Audit u/s 35(5) would arise only if the prescribed limit of turnover exceeds Rs. 2 cr. and certified reconciliation statement -GSTR-9C shall require to be submitted.
On the other hand, GSTR-9 is an Annual return which is required to be filed by every registered person irrespective of threshold limit of turnover.
Consequences for not filing GST Annual Return
Notice to return defaulters– Section 46) Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.
Levy of late fee– Section 47 (2) Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent. of his turnover in the State or Union territory.
