Step 1: Preparation

• The taxpayer or the auditor appointed by the taxpayer prepares for the GST audit by gathering necessary documents, records, and information required for the audit. This includes books of accounts, GST returns, invoices, bills of supply, input tax credit (ITC) documents, e-way bills, financial statements, and other relevant records.

Step 2: Appointment of Auditor

• The taxpayer appoints a qualified Chartered Accountant or Cost Accountant as the auditor to conduct the GST audit. The auditor should be independent, objective, and competent to perform the audit effectively.

Step 3: Opening Meeting

• The auditor holds an opening meeting with the taxpayer to discuss the audit objectives, scope, methodology, timelines, and expectations. The taxpayer provides access to relevant documents and records for the audit.

Step 4: Examination and Verification

• The auditor examines and verifies the taxpayer’s GST compliance, including:
  • Verification of GST returns filed, including GSTR-1, GSTR-3B, GSTR-2A, and annual return GSTR-9.
  • Review of books of accounts, invoices, bills of supply, e-way bills, input tax credit (ITC) availed, and other relevant documents.
  • Reconciliation of ITC claimed in GST returns with books of accounts and supplier invoices.
  • Verification of tax payments made under CGST, SGST, IGST, and cess.

Step 5: Analysis and Assessment

• The auditor analyzes the audit findings, identifies discrepancies, errors, or non-compliance with GST laws, rules, and regulations, and assesses the impact on GST liabilities and compliance obligations.

Step 6: Draft Audit Report

• Based on the examination and analysis, the auditor prepares a draft GST audit report documenting the audit observations, findings, recommendations, and suggested corrective actions. The draft report is shared with the taxpayer for review and comments.

Step 7: Discussion and Clarifications

• The auditor discusses the draft audit report with the taxpayer, addresses any queries or clarifications raised by the taxpayer, and considers their inputs before finalizing the audit report.

Step 8: Final Audit Report

• The auditor finalizes the GST audit report incorporating any feedback or clarifications provided by the taxpayer. The final audit report is signed by the auditor and submitted to the taxpayer.

Step 9: Submission to GST Authorities

• The taxpayer submits the final GST audit report along with any required documentation to the GST authorities within the specified timeframe, as per GST audit requirements.

Step 10: Compliance and Follow-Up

• The taxpayer takes necessary corrective actions based on the audit findings and recommendations to rectify any identified discrepancies or non-compliance with GST laws. The taxpayer may also follow up with the GST authorities on any outstanding issues or queries related to the audit.