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TMI BlogDraft audit programme for GST AuditX X X X Extracts X X X X X X X X Extracts X X X X ..... Draft audit programme for GST Audit - By: - Rajagopalan TS - Goods and Services Tax - GST - Dated:- 18-1-2019 - - AUDIT PROGRAM FOR GST AUDIT 1 Preliminary Check GST registration certificate Cross check the name of the entity with PAN or Company incorporation certificate Check for single registration or multiple registration - ask for documentation Name board to contain GST registration Ask client to log on to GST portal and verify whether it is active still 2 Transition Verify the June 2017 returns of Service tax, Excise and VAT Take stock of the closing balances as per those re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns Verify whether it is reflecting in the Trans 1 statement Verify the documentation for Trans 1 filing with the department Correspondence with department on Trans 1 credit disallowance if any (specifically ask for it and record) Capital goods credit balance 50% under Excise and 1/3 rd or 2/3 rd under VAT should be verified How Cess is handled in the transition. As per department Cess cannot be carried forward in GST. If company carries document it and ask for their stand on the same 3 GSTR 3B Whether GSTR 3B has been filed for all the months - July 2017 to date Verify all the returns individ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually and no test check of the same Verify the correctness of the physical copy with the portal numbers and match the same GST Liability to be classified separately as IGST, CGST and SGST Verify how this is derived - books of accounts Whether the liability shown in GSTR 3B matches with the books of account If not is there any reconciliation and if available please take a copy of the same as our document GSTR3B liability should match with liability shown in GSTR 1 Discuss how the discrepancy comes on the same GL balances should be captured and take a screen shot of the same for our records GL balance shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld always show credit balance and if any debit balance is there record it and ask for explanation Check the 3B return status in the portal, submitted or filed status Check the GST portal for any queries raised by the department on line and what action taken by the client 4 GSTR1 Whether GSTR1 has been filed for all months - July 2017 to date Verify the physical copy with the portal numbers for correct upload of data Check all the returns for correct filling of all the columns, IGST not updated as local and vice versa Verify how the purchases from unregistered dealers handled Verify how the SEZ or Export trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions are reported Cross verify the rate of tax applied with the tariff headings State code - whether correctly filled up On a random basis check the GST registration of customers in the portal for correctness of the same Check the status of the return - Submitted or filed Open the dash board and verify whether all the returns are appearing in the portal How the data is extracted from the company s books - manually or downloaded automatically. If Excel download is used verify the no. of document control of the Excel and company s records Counter check the documents updated in GSTR 1 form with the Excel download or comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any s record - Missing documents to be captured clearly Match the sales reported in GSTR 1 and the company records In case of difference whether any reconciliation is prepared and why Check how the difference is handled by the company How debit or credit notes handled in the GSTR 1 system Price revisions before GST how handled - no tax charged or erstwhile excise and service tax charged Price revisions post GST how handled - whether correct rate of GST charged. Compare the rate with the original rate charged in the invoice Documents for issuing credit note or debit note - approval process and how the same is accounted by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Compare the company s books and GST records for debit note or credit note JsOne tool how handled - whether Govt site or private software used - if private software used then carefully check whether all transactions are uploaded properly in the portal The liability quantified in GSTR 1 - local and IGST must match with the liability quantified in GSTR 3B Cut off procedure - last document no. for each month as per books accounts and first document no. for the next month - take for Aug 2017, Nov 2017, Jan 2018 and March 2018. Check whether Tally is closed each month and verify the same for three months during the period of audit In case of SAP please ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verifiy whether period closing is done and ask the concern to open the system and show that the period closure is done. Take a screen shot for our records 5 Input credits Verify the input credit disclosed in GSTR 3B under CGST, SGST and IGST Verify whether the same reflects in company s books of account and matches If there is difference record the same and ask for explanations If rectified subsequently document the same - today there is no concept of interest but may come at a later date Capture the % of input credit to the GST liability and record it Whether the GL of the company has separate codes for input credit separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately for CGST, SGST and IGST - if not it should be opened separately Again for more than one state separate IGST GL codes to be opened IGST should be used for SGST and CGST and not vice versa - check this aspect Ineligible credits as per the GST act should be strictly followed - verify this In case of deviations please record the same and bring to the notice of the concerned in GST Credit should not be availed for purchases from vendors on composition scheme Capital goods credit should be availed fully and not at 50% or 1/3 rd as per prior provisions Inter plant movement and depot movement should be with GST document and GST payments o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly. Check whether the same is followed and credit availed in the other plant or depot Sub-contract movement will not entail credit availment unless he provides GST invoice Import IGST will be eligible for credit and verify the same with Bill of entries Take a listing of vendors of the client with GST nos and check whether client has such a list and updation frequency to be verified How does the client verify whether the vendors have filed their GSTR 1 returns - Process to verify and document For those not filing the returns what steps the company takes to ensure that they file and the credit availed is legal and correct Is there any check for ensur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the vendors making GST payments on monthly basis - If so record the same Rejection of materials - How handled in GST - Whether the client raises the rejection debit note with GST and reverses the credit or not In the alternative for full rejection of invoice client need not avail credit and also raise debit note for rejection. In this case the transportation of materials could be a problem and how handled - verify this Manufacturing rejection how handled - Debit note raised with GST or not If so on what basis the invoice no. of the vendor is captured and debit note raised Credit for capital goods should be reduced from the cost of assets and depreciation to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided only on the net - check this aspect both from Company Law and Income tax aspects Disposal of capital goods would not entail reversal of credit but only charging GST under the GST regime. Let not client reverse any input credit for the same 6 Documents Invoice to be as per the format given in GST rules Input invoice should satisfy the same - otherwise credit can be denied E Way bill to be raised as per rules - documentation for tracking the same Sub-contract movement - what document is raised and how tracked Whether the company stores the returns in a separate folder or print outs kept in files - recommend storage in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soft form in a separate folder Trans 1 credit document to be preserved Get in writing from the company the places where the client s materials are kept - input materials and output materials, inventory and sub-contract locations. - verify whether these are captured in the RC Any change in director or partner or owner should be intimated and changes to be incorporated in the RC Clear back up work sheets for GST liability including IGST, input credits and net liability to be maintained for each month - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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