CBIC's Model All India GST Audit Manual 2023: All You Need to Know

The Central Government published the Goods and Services Tax (GST) audit manual for the year 2023, in the month of April, which was prepared by the Committee of Officers on GST Audits. In light of the recent suggestion from the parliamentary panel for implementing an online audit mechanism to address anti-competitive practices, understanding the model proposed by the government becomes crucial.

The responsibility of creating a comprehensive All India Model GST Audit Manual, referred to as the Model GSTAM or the Manual, for both the Central Government and the State Governments, was assigned to the Committee of Officers on GST Audit.

To accomplish this task, a sub-committee of officers was formed with the objective of gathering existing and preferred audit practices and drafting a model audit manual. The sub-committee's main task was to document the prevailing audit practices in both the Central and State Indirect tax administrations and incorporate the most effective practices for GST Audit that can be implemented uniformly throughout the country.

The task of compiling this manual was allotted to West Bengal as a Member of the Committee, studying thoroughly the Audit manual prepared by Central Government, GST Audit Manuals and Standard Operating Procedures prepared by various states like West Bengal, Punjab, Maharashtra, Karnataka, Bihar, and Uttar Pradesh as well as the module developed by the GSTN and available to Model 2 states.

After compilation, the draft Model GST Audit Manual was circulated to all the members inviting their inputs and suggestions. The Model GST Audit Manual has been prepared after incorporating many of these suggestions. The Manual tries to take into account the differential structure of GST revenue administration prevailing in different States and the Centre.

The objective of this manual is to provide insights into the principles and procedures of audit and to give a holistic view of the entire process to the users of this Manual.

In the pre-GST regime, the audit process of States/UTs often got lengthened due to procurement and production of various statutory forms by the auditees in order to claim statutory deductions in the States/UTs.

The GST regime does not require production of any such statutory forms and hence it is expected that substantial time of both the auditor and the auditee would be saved. Furthermore, audits in the GST regime have been designed in such a way as to complete the entire process within a short span of time.

GST Manual Contains:

Chapter 1: Definition of Audit and Legal Provisions

Chapter 2: Purpose and Principles of Audit

Chapter 3: Audit Flow Chart and Steps of Audit

Chapter 4: Audit Planning and Preparation, Desk Review and Audit Plan

Chapter 5: Conduct of audit, findings and finalisation of audit

Chapter 6: Follow up of audit

Chapter 7: Audit in certain circumstances

Chapter 8: Thematic and Multi-locational Co-Audit

Chapter 9: Capacity Building in specialised areas etc,.

Annexures

Annexure 1: Notice for conducting audit

Annexure 2: Letter seeking mutual assistance

Annexure 3: Questionnaire for auditee

Annexure 4: List of documents/ statements and books of accounts to be produced for the purpose of audit

Annexure 5: Format of a sample Audit Plan

Annexure 6: Final Audit Report (FAR)- FORM GST ADT 02

Annexure 7: Format of status report to MCM

Annexure 8: Check list for key points for supply and supply of Goods or Services or both

Annexure 9: Levy of tax on Reverse Charge Mechanism (RCM)

Annexure 10: Check list for key points for value of supply and value of supply

Annexure 11: Input Tax Credit

Annexure 12: Important Changes in GST Laws and Rates during 2017-18 & 2018- 19 184 Annexure 13: Due dates and extension of due dates of submission of various returns Annexure 14: Ratio Analysis & Trend Analysis

Annexure 15 Study of Profit and Loss Account and Balance Sheet

Annexure 16: Indian Accounting Standards in the perspective of GST

Annexure 17: Recommendations for Model GST Audit Best Practices and Procedure as per the report of sub-committee on ToR No. 1

Annexure 18: Composition and purpose of the Committee of Officers on GST Audit alongwith modified ToRs

The modified terms of references are mentioned in Annexure 18. The department has made the disclaimer that the examples / illustrations mentioned in this Manual are for the purpose of guidance of the departmental officers only. They do not constitute any legal authority.

The Department of Gujarat State Tax, the nodal agency for the administration and collection of various taxes in the State of Gujarat has released the Model Goods and Services Tax ( GST) Audit Manual 2022 for the State tax officials and officers.

Read More: Gujarat Government releases Model GST Audit Manual 2022

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