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 returns
* 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 1/3rd or 2/3 rd under VAT should be verified
* How Cess is handled in the tr
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* 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 transactions 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 downloa
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r 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 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 – to
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t 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 ensuring 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
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