GST Audit Checklist.

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 GST AUDIT CHECKLIST.

Particulars

Remark

Registration & Basic Profile

·       Verify GST registration details (legal name, trade name, address, nature of business).

·       Check additional places of business and branch registrations.

·       Verify amendments made during the year (timely filing).

·       Check cancellation / suspension, if any, and its impact.

Applicability of E-Invoice

·       Check the compliances

Applicability of E-Way Bill

·       Check the compliances

Outward Supplies / Income Side

·       Verify whether GST is correctly paid on all taxable income.

·       Classification of supplies: taxable, zero-rated, exempt, NIL-rated, non-GST.

·       Verify correct GST rate, HSN/SAC, place of supply.

·       Check advances received and GST liability (especially for services).

Exempt / Nil Rated / Non-GST Supplies

·       Identify exempt, nil-rated and non-GST supplies.

·       ITC reversal under Rule 42 & Rule 43 correctly computed and reversed.

Export & Zero-Rated Supplies

·       Export with payment of tax – refund correctness.

·       Export without payment of tax:
• LUT validity and LUT date prior to date of export (Rule 96A).
• Realisation of export proceeds within prescribed time (Rule 96A).

Inward Supplies / Expenses Side

·       Verify ITC availed with books vs GSTR-2B.

·       Compliance with Section 16(2) conditions:
• Tax invoice available
• Goods/services received
• Tax paid by supplier
• Return filed

·       Time limit under Section 16(4) – ITC not claimed beyond statutory limit.

·       Check ineligible ITC reversed correctly (Section 17(5)).

·       Verify capitalization vs revenue expenses impact on ITC.

·       Check RCM liability on notified services and supplies.

·       Verify timely payment of RCM and ITC availment thereafter.

Creditors & Payments

·       180 days payment condition: ITC reversal for non-payment to vendors.

·       Re-availment of ITC on subsequent payment.

·       Check GST implication on advances received for services (GST paid on advance?).

Capital Goods / Fixed Assets

·       Sale of Fixed Assets:
• Check whether GST paid on transaction value OR
• ITC reversed as per applicable provisions.

Investments & Other Income

·       ITC reversal on sale of shares, mutual funds, securities.
The value of security shall be taken as 1% of the sale value of such security (Explanation to Rule 45).

·       Interest income treatment and related ITC impact.
For the purpose of Rule 42 & Rule 43, interest on loan or FD will be excluded from exempted income (except Bank, FI & NBFC) as per Explanation 1(b) of Rule 43.

Utilisation & Payment of Tax

·       Rule 86B applicability – minimum 1% cash payment compliance.

Job Work Transactions

·       Movement of goods under job work challans.

·       Timely return of goods from job worker:
• Input goods: within one year
• Capital goods: within three years

If the goods are not returned within the specified time frame, it is treated as a deemed supply by the principal to the job worker on the date the goods were originally sent out.

TDS / TCS under GST

·       Applicability of GST TDS / TCS provisions.

·       Reconciliation with GSTR-7 / GSTR-8.

·       Timely deduction/collection and deposit.

·       Credit reflected in electronic cash ledger.

Branch Transfers / Related Party Transactions

·       Supplies between distinct persons.

·       Valuation as per GST rules.

·       ITC availment by recipient branch.

·       Proper invoicing and tax payment.

Sale on Approval Basis

·       Identification of goods sent on approval.

·       Time limit for return of goods.
Tax liability if goods not returned within prescribed period.
Deemed supply if goods not returned within 6 months and GST becomes payable.

 

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