With the introduction of the concept of GST Audit, it is important to know and taken int consideration various facts that is needed before we conduct GST Audit. In this presentation, we have covered the concept of filing of GSTR 9C, its applicability and various other topics that one should take care of. The presentation also covers an example of GSTR 9C based upon a hypothetical case. The PPT is a one shot compilation of various topics associated with GSTR 9C - GST Audit.

1. CA Pooja Jajwani

2. CA Pooja Jajwani
Applicability of GST Audit
• Section 35(4) - Turnover during a financial year
exceeds prescribed limit. Assessee shall get his
accounts audited by a CA and submit a copy of
audited annual accounts, the reconciliation statement.
• Rule 80(3) - Aggregate turnover during a financial year
exceeds two crore shall get his accounts audited and
furnish annual accounts and reconciliation statement.
• Section 44 – To furnish annual return on or before 31st
December of next year.

3. CA Pooja Jajwani
Difference between Turnover and Aggregate Turnover
• Aggregate turnover - aggregate value of taxable (excluding RCM inputs), exempt,
exports and inter-State supplies of persons having same PAN and computed for all
India but excludes GST tax and cess.
• Turnover - aggregate value of taxable supplies (excluding RCM inputs), exempt,
exports and inter-State supplies made from the State but excludes GST tax and cess.
• Can Rules override the statue?

4. CA Pooja Jajwani
Technical issues in computing turnover for Audit
• Whether the audit is required in below scenarios?
Turnover 1 Crore
Exempt turnover 90 lakhs
Sale of land 20 lakhs
Turnover 50 lakh
Exempt 90 lakhs
Nil rated 10 lakhs
Zero rated 50 lakh
Turnover 50 lakh
RCM
purchases
100 lakhs
Nil rated 10 lakhs
Zero rated 50 lakh
Exempt
Turnover
250 lakhs Exempt Turnover (Closed
the business before
31.03.2018 and
surrendered registration)
250
lakhs

5. CA Pooja Jajwani
Meaning of Audit – Section 2(13)
• Examination of records, returns and other
documents – Theory of sampling can be
applied?
• Maintained/furnished under this Act or rules
• To verify the correctness of turnover declared,
taxes paid, refund claimed and ITC availed –
Whether TRAN 1 is covered? ITC advance
rulings
• To assess compliance with provisions of Act or
rules – Whether the auditor is suppose to
report each and every small non compliances?
- First you certify then
you disqualify?

6. CA Pooja Jajwani
Records that required to be furnished
• Supply of goods or services and RCM
• Stock of goods.
• Input tax and Output tax
• Invoices, bills of supply, delivery challans, credit notes, debit notes, vouchers
• Advances received, paid and adjustments made thereto.
• Description, value and quantity of goods or services received
• Description, value and quantity of goods or services utilized
• Payment received for each works contract

7. CA Pooja Jajwani
Why Reconciliation?
• Turnover under GST is as per Time of supply provisions.
• Time of supply for services is earlier of invoice or payment.
• Time of supply for goods is issuance of invoice.
• Turnover in Financial Statement is as per IND AS or AS.
• GST Reconciliation is a reconciliation between turnover as per time of supply
and turnover as per financial statements.

8. CA Pooja Jajwani
Lets check an example
Mr. A is a works contractor
Particulars Amount
Value of invoices issued from July to
March 500,000
Payments received from July to
March 500,000
Total Turnover under GST 10 Lakhs
Sales booked as per AS - 7 15 Lakhs
Reconciliation
between all
3Bs and
Balance Sheet
Authorities should
not be concerned
with Financials
when tax is to be
discharged as per
Time of supply

9. CA Pooja Jajwani
What is different from earlier regime?
• Reconciliation with 26 AS only at the time of assessments. Now it is a part of GST
Audit.
• Other reconciliations are prerequisites reconciliation.
• Mistakes committed in the first year.
• GST came in the middle of the financial year.

10. CA Pooja Jajwani
Let us make an audit report

11. CA Pooja Jajwani
Deemed supply under Schedule I

12. CA Pooja Jajwani
Discounts
Section 15(3) :- The value of the supply shall not include any discount which is given––
(a) before or at the time of the supply if such discount has been duly recorded in the
invoice issued in respect of such supply; and
(b) after the supply has been effected, if—
(i) such discount is established in terms of an agreement entered into at or before the
time of such supply and specifically linked to relevant invoices; and
(ii) input tax credit as is attributable to the discount on the basis of document issued by
the supplier has been reversed by the recipient of the supply.

13. CA Pooja Jajwani
Special caution points
• In Part A of the audit report, auditor is supposed to certify figures. In Part B of the
audit report, auditor has to give qualification on figures. Improper drafting.
• Systematic evaluation of eligible ITC and ITC which is the part of Inventory as per AS
2.
• Separation of figures for each and every GSTN from financial statements.
• Sale of fixed asset is taxable turnover under GST however it is not sales in Financial
Statements.

14. CA Pooja Jajwani
• In financial statements of Agents, supply on behalf of principal needs to be added.
• Off balance sheet and non balance sheet items to be analysed for supplies without
consideration.
• Track of financial credit notes.
• Claim depreciation vs credit on capital assets.
Special caution points

15. CA Pooja Jajwani
• Lease – FS – Interest and leasing charges. In GST – full amount is taxable.
• Treatment of Govt. grants.
• Related party disclosures.
• IND AS 115 – Element wise accounting VS Time of supply – No
correlation
Special caution points

16. CA Pooja Jajwani
Challenges in transition
• Can an auditor comment on availment of transitional credit?
• Can an auditor comment on the treatment given on 142(11)(c)?
• Difference of opinion.
• Effect of 142(11)(c)
• Liability of auditor on future litigations.

17. CA Pooja Jajwani
• Thank you..!
• E-mail your queries at
Pooja.jajwani@smaca.in

18. CA Pooja Jajwani
www.smaca.insandesh.mundra@smaca.in
Sandesh Mundra & Associates
Chartered Accountants
304, Super Plaza,
Sandesh Press Road, Vastrapur,
Ahmedabad - 380054  +91-079-40032950