GST Audit Manual 2023

The Goods and Services Tax (GST) Audit Manual 2023 is a comprehensive guide for tax officials and auditors on conducting audits of registered taxpayers' GST records. It provides guidance on GST audit procedures and compliance requirements under the GST law. It has been prepared by the Committee of Officers on GST Audits.

Continue reading as we discuss the GST Audit Manual in more detail for your better understanding.

What is GST Audit?

GST Audit is the process in which a qualified auditor examines a taxpayer's financial records to ensure GST regulations are complied with. The auditor examines books of accounts, invoices, GST returns, and other relevant documents. 

Introduction to GST Audit Manual 2023

The GST Audit Manual 2023 PDF was prepared by the Committee of Officers on GST Audits, and published on April 13, 2023. The sub-committee of officers studied existing and desirable audit practices and adopted the best practices for GST audits across the country. 

The objective of the manual is to provide insights into the principles and procedures of audit and to give a holistic view of the entire process to users. It aims to be an extensive and comprehensive document with a systematic workflow of audit, ranging from brief criteria of selection to the completion of the process, including mechanisms for Joint and Thematic audits as and when they are approved by the Council. 

The Model Audit Manual GST is expected to form an important reference for audit principles, practices, and procedures for GST audit practitioners in the country.

Who Can Use the GST Audit Manual 2023 and Audit Applicability?

The GST Audit Manual CBIC is intended for use by:

• Tax officers
• Auditors
• Businesses subject to GST audit. 

As per Section 65 of the CGST Act and Rule 101(3), GST audit can be conducted by an authorised commissioner or officer to verify the registered person's records and books of account, with the help of a team of officials.

Contents in GST Audit Manual

The Model All India GST Audit Manual 2023 covers the following topics:

Table of Contents

• List of abbreviations
• Foreword
• Executive Summary
• Chapters

• Annexures 

Key Takeaways and Best Practices for Businesses under GST Audit

Here are the key takeaways from all nine chapters of GST Audit Manual 2023:

Chapter 1

This chapter of the GST Audit Manual 2023 provides an overview of the definition of audit, various types of audits, and important legal provisions related to audits.

Chapter 2

In this chapter, the manual aims to address the intended audience, purpose, and objectives of the audit, including the principles of audit and how to handle the auditee, their rights, and obligations. Additionally, the chapter discusses the prerequisites of an audit officer.

Chapter 3

In this chapter, you will learn how the audit process works, including the different stages involved in the audit, how taxpayers are selected for the audit, and how audit teams are formed and assigned. Additionally, there is a summary of a proposal from the sub-committee on using Data Analytics to identify taxpayers for audit.

Chapter 4

In this chapter, you will find information about the activities that should be carried out before conducting an audit, such as requesting information from the auditee, planning and preparing for the audit, which includes conducting a Desk Review, and formulating an Audit Plan.

Chapter 5

In this chapter, the focus is on the execution of the audit process, including the beginning of the audit, the examination of the books of accounts, the identification of indicative parameters, the communication of discrepancies found, the preparation of the Draft Audit Report, and its approval. It also covers the role of the Monitoring Committee in reviewing the audit findings and finalising the audit report.

Chapter 6 

In this chapter, the focus is on the consequences of the audit, including the actions that may be taken as a result of the findings such as demand and recovery proceedings.

Chapter 7 

This chapter guides conducting an audit in specific circumstances. It outlines possible scenarios that may occur during an audit such as finding the auditee to be non-existent, cancellation of GST/Registration Certificate of the taxpayer, or seizure of taxpayer documents. The chapter also includes general guidelines for dealing with such situations.

Chapter 8

This chapter provides information on the administration of audits, including the roles of officers involved, the constitution of committees, and the standard operating procedures for conducting thematic audits and multi-locational co-audits. Thematic audits concentrate on particular themes, whereas multi-locational co-audits bring together auditors from various locations or organisations to perform an audit of a shared space or function. 

Chapter 9

This chapter focuses on developing specialised skills and knowledge in certain areas related to GST audits. It covers training and capacity-building programs aimed at enhancing the capabilities of audit officers. The chapter also emphasises the importance of building knowledge in financial accounting, as it is a crucial element in the GST audit process.

Download the model GST audit manual 2023 PDF

Click on the below link to download the manual-

GST Audit Manual 2023

Source: GST Council

FAQ on GST Audit

Who is the proper officer for audit under GST?

The term ‘proper officer’ refers to the Commissioner or an officer of the central tax who has been authorised by the Commissioner in the Board to perform a specific function under the GST Act.

What are the criteria for GST audit by department?

As per section 65 of the CGST Act and Rule 101(3) of GST Audit Rules, the department can conduct a GST audit on a registered person for a financial year or part thereof or multiples thereof based on a general or specific order from the Commissioner or authorized officer, to verify their records and books of account, with assistance from a team of officers and officials.

What is the maximum turnover without GST?

For the sale of goods in states that fall under the normal and special categories, the maximum turnover without GST is equal to Rs. 40 lakh and Rs. 20 lakh, respectively. While for normal and special category states, the maximum turnover for services provided without GST is Rs. 20 lakh and Rs. 10 lakh.

How do you conduct a GST audit?

Conducting a GST audit involves examining a taxpayer's financial records and GST returns to ensure compliance with GST regulations and the correct payment of tax, as well as preparing an audit report detailing any discrepancies or non-compliance.

What is a GST audit checklist?

A GST audit checklist is a comprehensive list of items or tasks that an auditor should review during a GST audit. It includes items such as reconciliation of GST forms, e-way bill requirements, and transfer of stocks.