Introduction
GST is a trust based taxation regime wherein 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.
“Audit” has been defined in section 2(13) of the CGST
Act, 2017 and it means the examination of records,
returns and other documents maintained or furnished
by the registered person under the GST Acts or the
rules made there under or under any other law for
the time being in force to verify the correctness of
turnover declared, taxes paid, refund claimed and
input tax credit availed, and toassess his compliance
with the provisions of the GST Acts or the rules made
thereunder.


Types of Audit
GST envisages three types of Audit. The first audit
is by a chartered accountant or a cost accountant.
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 which is the normal audit, the
Commissioner or any officer authorised by him, can
undertake 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.


Procedure
• During the scrutiny, inquiry, investigation or any
other proceedings of a registered person, the
Assistant Commissioner or any officer senior to
him, having regard to the nature and complexity of
the case and the interest of revenue, might be of
the opinion that the value has not been correctly
declared or the credit availed is not within the
normal limits.


• In such cases, with the prior approval of the
Commissioner, the Assistant Commissioner or
any officer senior to him can directthe registered
person in FORM GST ADT-03 to get his records
including books of account examined and
audited by a specified chartered accountant or
a cost accountant. The chartered accountant
or a cost accountantwill benominated by the
Commissioner.


• The chartered accountant or cost accountant so
nominated has to submit a report of such audit
within the period of ninety days, duly signed and
certified by him to the Assistant Commissioner.

• On an application made by the registered person
or the chartered accountant or cost accountant or
for any material and sufficient reason, the Assistant
Commissioner can extend the said period by a
further period of ninety days.


• The provisions of special audit shall have effect even
if the accounts of the registered person have been
audited under any other provisions of the GST Act or
any other law for the time being in force.


• The registered person shall be given an opportunity
of being heard in respect of any material gathered
on the basis of special audit and which is proposed
to be used in any proceedings against him under this
Act or the rules made thereunder.


• The expenses of the examination and audit of
records, including the remuneration of such
chartered accountant or cost accountant, shall be
determined and paid by the Commissioner.


• On conclusion of the special audit, the registered
person shall be informed of the findings of the
special audit in FORM GST ADT-04.


• Where the special audit results in detection of tax
not paid or short paid or erroneously refunded,
or input tax credit wrongly availed or utilised, the
process of demand and recovery will be initiated
against the registered person.


Conclusion
Special audit provides a lawful and legal way for the
GST officers to take the assistance of a chartered
accountant or cost accountant to determine tax
liabilities in complex cases. The professional expertise
of a chartered accountant or cost accountant will be
of great significance in ensuring that theinterest of
revenue is safeguarded at all times.

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