Goods and Services Tax – GST – By: – Rajagopalan TS – 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 transition. As per department Cess cannot be carried forward in GST. If company carries document i
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hat 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 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 c
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ut 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 – 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 separately for CGST, SGST and IGST – if not it should be opened separately A
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dors 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 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 provided only on the net – check this aspect both from Company Law and Income tax aspects Disposal
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