The Maharashtra Goods and Services Tax Department (MGSTD) notified the general procedure for GST audits under Section 65 of the MGST Act, 2017.
GST is based on voluntary compliance of law by Registered Taxpayers (RTP). Audit of RTP is a function under GST Act to verify the correctness of compliance of GST laws by the RTPs.
The Maharashtra GST Department is initiating audits under Section 65 of the MGST Act in the case of selected RTPs. The present circular is being issued to clarify certain aspects related to GST Audit under Section 65 of MGST Act, 2017.
The department while elaborating on the object of GST audit said that the primary object of GST Audit is to ensure and promote, the correctness of turnover declared, taxes paid, refund claimed & input tax credit availed, and to assess the compliance of Registered Taxpayers (RTP) with the provisions of GST Act and rules made there under” GST Audit is a tool with MGSTD to ascertain and ensure compliance of laws that are implemented by the MGSTD.
At a practical level, the object of audit is to ascertain the correctness of returns, annual returns and to identify inadequacies in returns, if any, when checked against books of accounts maintained by RTPS. If the returns are not filed or incorrectly filed, then, the Audit Officer is expected to quantify the correct liability of RTP & enforce recovery.
The department stated the procedure wherein it was stated that the cases for GST Audit are selected on the basis of certain criteria based on Tax Risk analysis from returns, annual retums filed and other statutory compliances made or not made, and / or simply by random selection of cases for audit.
The GST audit is carried out with prior information to the RTP which is the notice of information to the RTP in form ADT – 01. Along With the ADT-01, the AO may also call for certain information that the RTP should keep ready at the time of visit or may send in advance physically or through mail to the Audit Officer.
The audit is to be carried out at the Place of Business (POB) of RTP by the officers of MSTD. In exceptional cases after the initial visit at POB. the verification of books of accounts may be done in the office of AO.
In exceptional cases, if the AO is unable to keep the appointment then he will inform the RTP well in advance about postponement of visit which also applies if the RTP is unable to keep the appointment
The MGSTD enlisted various rights of the dealer.
Firstly, to check the identity of each and every member of the audit team.
Secondly, to get at least 15 days prescribed time limit for collection, compilation, preparation and arrangement of documents for audit from receipt of audit notice.
Thirdly, to engage an authorized representative to act and appear on his behalf in audit proceedings.
Fourthly, to seek adjournment of proceeding in unavoidable circumstances for submission of documents keeping in mind the timelines required for completing the audit.
Fifthly, to submit his say through audit proceeding or through letter or e-mail communication.
Sixthly, to ensure that opportunity of being heard is given properly to him by audit authority. To represent and submit say in case of debatable issues during audit.
Seventhly, to ensure that the audit is completed by the audit team in prescribed time limit as per GST.
Eightly, to receive findings of audit from the Audit Officer within 30 days of conclusion of audit
Lastly to take benefits of the voluntary payment tax, if the audit objections are acceptable, and take advantage of the benefits available under sections 73(6)/74(6).
The department also stated the various duties of the dealer.
Firstly, to comply in time to the GST-ADT-01 notice and all necessary correspondence from the audit officer with respect to the audit proceeding.
Secondly, to make available all necessary books of accounts (physical record as well as accounting system access/ electronic record as per necessity) to audit team and any other document/information required to complete the audit
Thirdly, to provide the necessary facility to verify the books of account/other documents as required
Fourthly, to ensure the presence of either the Registered Person or his authorized representative at the place of business (POB) where audit is being conducted during audit activity so that he can explain the books and the business activity properly..
Fifthly, to extend necessary cooperation to the audit team during POB audit visit for timely completion of audit.
Lately, to follow the statutory timelines in case of making payment if audit results are accepted and/or to comply with notice under section 73/74 of GST Act in case audit findings are not accepted.
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