DEFINITION OF AUDIT - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

2. DEFINITION OF AUDIT: Audit under the CGST Act, 2017 implies Section 2(13) of the CGST Act, 2017 (a) Detailed examination of (i) records, (ii) returns and (iii) other documents maintained/ furnished by a registered person, under GST law/any other law or rules- (b) For verification of correctness of (i) turnover declared (ii) taxes paid (iii) refund claimed (iv) input tax credit availed and (v) assessment of compliance with provisions of GST law and rules. 2.1 Principles of Audit: The basic principles of audit are (i) conducting audit in a systematic and comprehensive manner (ii) scrutinizing the records maintained in the normal course of business with emphasis on the identified risk areas (iii) applying audit techniques based on materiality, i.e., degree of scrutiny and application of an audit tool depending upon the identified nature of risk factors (iv) proper recording of all checks and findings made during the entire audit (v) identifying unexplored compliance verification parameters (vi) educating the taxpayer for voluntary compliance. 2.2 Types of audits under CGST Act, 2017: The CGST Act, 2017 prescribes the following two types of audits: Note: This chapter mainly deals with audit by tax authorities, as prescribed under section 65 of the CGST Act, 2017 and Rule 101 of the CGST Rules, 2017.