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TMI BlogIndicative parametersX X X X Extracts X X X X X X X X Extracts X X X X ..... ration data, if available. 5.3.2 Return Analysis This is a most vital area before commencement of the Audit program. A great deal of the groundwork can be done upon analysis of the available return figures and thereby having a prima-facie idea of the business trend of the auditee. 5.3.3 Illustrative steps that may be considered for an effective Return Analysis: * HSN code of the goods and/or SAC of the services dealt in by the RTP should be verified where available to ensure that such are in conformity with the schedules/notifications and it is to be checked that the proper rate of tax thereupon was applied on outward supplies as shown in Form GSTR-1 & Form GSTR-3B. * Time of filing of returns should be noted and should be checked to confirm whether the returns were filed within the prescribed time. * Outward supplies as declared in Form GSTR-1, Form GSTR-3B and GSTR-9 should be compared with the Books of Accounts as maintained and produced by the auditee. The reconciliation statement, in case of any difference, is required to be examined with supporting documents and explanations along with Form GSTR-9/9A and Form GSTR-9C, if such have been submitted by the auditee. * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of export the value may be calculated as prescribed in rule 89(4)(C) of the CGST Rules, 2017 i.e. the value which is 1.5 times the value of like goods domestically supplied by the supplier). * In respect of claim for refund of unutilized ITC on account of zero-rated supply, adequate caution is required to be taken so that, ITC on account of transitional credit, capital goods are not claimed for refund. * Claim for refund of unutilized ITC may be made on account of inverted tax structure. In such cases, (i) verification of the classification of inputs and output supplies and the respective rates of taxes attracted by them is very crucial; (ii) Refund of unutilized ITC in accordance with section 54(3)(ii) of the CGST/SGST Act is provided where credit has accumulated on account of rate of tax on inputs being higher than rate of tax on output supplies. * The claim of ITC of an auditee should be checked against fulfilment of the conditions laid down in the Acts and Rules made thereunder. * If usage of ITC for payment on account of export is significantly high, in depth scrutiny of the availment of ITC is warranted. * In depth checking is needed in respect of goods an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er type. Moreover, services sector may demand a different angle of analysis compared to the goods sector. It may be noted that trend analysis should also be consistent with the industry-trends during the same period; a rising/falling trend in industry does not gel with a reverse trend in the case of a particular auditee unless the auditee faces an altogether different/abnormal situation. 5.3.5 Areas of concern during examination Following points may be covered in the process of examination. 5.3.5.1 Migration/Registration compliance Probable area of detection / examination Areas of concern Action to be taken Previous registration details under earlier Acts and up to date details of information of registration. If not disclosed there may be a tendency to hide earlier history of turnover and compliance (liabilities of taxes). Asking to provide such numbers and information. Up to date details of business promoters, additional place of business, bank accounts, details of authorized signatory. Why is examination of the above compliance important? Disclosing of the previous registration details is optional both in case of registration and migration. However, knowledge of prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d key points of supplies and supply of Goods and Services or both are given in Annexure 8. Check list for key points of value of supply and details of value of supply are in Annexure 10. A tax invoice is an important document. It not only evidences the supply of goods or services, but is also an essential document for the recipient to avail Input Tax Credit (ITC). Similarly, debit notes and credit notes are also vital documents. A supplier of goods or services or both is mandatorily required to issue a tax invoice. However, various situations may arise in a business, after issuance of an invoice. Possible situations are listed as follows: * The supplier has erroneously declared a value which is more than the actual value of the goods or services supplied. * The supplier has erroneously declared a higher tax rate than what is applicable for the kind of the goods or services or both supplied. * The quantity received by the recipient is less than what has been declared in the tax invoice. * The quality of the goods or services or both supplied is found to be deficient. In the aforesaid cases, the supplier may issue a credit note to the recipient. But, output tax reduction on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts. To examine cash flow, valuation, input and output ratio, etc. To examine correctness of tax compliance made in returns. RTP will be asked to produce following books of accounts: * Annual report and Director's report (if any) * Profit & Loss A/C * Balance Sheet and Trial balance if maintained * Notes to accounts * Tax Audit Report * Statement of income tax TDS. * List of HSN /SAC of the goods /or services in respect of the business. * Reconciliation statement in respect of Form GSTR 9, GSTR-1 AND GSTR 3B * Suppliers list with GSTIN (where applicable) * Ledger accounts of the suppliers * Statement of sales party wise and POS wise. * Supply for which tax paid in RCM. * Bank Statement for the period under audit * Stock register * Other documents and records as applicable as provided in section 35 of the Act The basic objective of audit stands on the principle of examination of books of accounts. The GST laws have prescribed the nature of books of accounts required to be maintained by an RTP. The officer in this case should be well aware of such provisions and ask the auditee to produce such books of accounts. Regarding maintenance of accounts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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