COMPULSORY AUDIT OF ACCOUNTS
- Circumstances in which audit is mandatory
Any dealer whose gross turnover in a year exceeds:
- 40 lakhs; or
- such other amount as the Commissioner may, by a notification in the Government Gazette specify,
shall get his accounts audited in respect of that year.
Notification
Commissioner has notified the limit of gross turnover in a year be Rs. 60.00 lacs w.e.f. 01.04.2010.
In other words w.e.f. 01.04.2010, limit of gross turnover in a year in respect of registered dealers to get their accounts audited by a Chartered Accountant, shall be Rs. 60.00 lacs instead of Rs. 40.00 lacs.
- How to calculate turnover?
Turnover means the aggregate amount for which the goods are either bought or sold, supplied or distributed by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or for any other valuable consideration.
Note (a) The turnover in respect of delivery of goods on hire purchase or on any system of payment by installments shall be the market price of the goods so delivered.
Note (b) The turnover in respect of the transfer of the right to use any goods shall be the aggregate amount received or receivable by the dealer as consideration for such transfer.
Note (c) The amount for which the goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of, or before, the delivery thereof.
Note (d) Any cash discount on the price allowed in respect of any sale or any amount refunded in respect of articles returned by customers shall not be included in the turnover; and
Note (e) Where for accommodating a particular customer, a dealer obtains goods from another dealer and immediately disposes of the same to the said customer, the sale in respect of such goods shall be included in the turnover of the latter dealer but not in that of the former.
- Who shall execute the audit and when?
Audit is required to be executed by a CA or Cost and Works Accountant within 6 months from the end of that year in which gross turnover exceeds 40 Lacs or any other amount as specified by commissioner and obtain a report of such audit in the prescribed form duly signed and verified by such CA or Cost and Works Accountant and setting forth such particulars as may be prescribed.
- Documents required to be furnished by dealer
A dealer is required to furnish to the Assessing Authority a certificate of such audit in Form GST-52 and a statement of accounts in Form GST-53 thereto duly signed by such CA/Cost and Works Accountant.
- Duration of Audit
A dealer is required to get his accounts audited and obtain the report within 6 months from the end of that year, in which the turnover exceeds the prescribed limit. For financial year ending on 31st March, the accounts are to be audited and report obtained by 30th September.
Illustration: XYZ Ltd. is required to get his accounts audited and obtain the report for financial year 1st April, 2009 to 31st March, 2010. What is the last date on which audit report is required to be obtained by XYZ Ltd. from its auditors.
Solution: XYZ Ltd. is required to get his accounts audited and obtain the report for financial year 1st April, 2009 to 31st March, 2010 till 30th September, 2010.
- Submission of Audit Report
A dealer is required to furnish true copy of such report to the Commissioner by the end of 1 month after expiry of the period of 6 months during which the audit would have been completed, i.e. the audit report is to be filed by 31st Oct, as the audit is required to be completed by 30th Sept.
Illustration: XYZ Ltd. is required to get his accounts audited and obtain the report for financial year 1st April, 2009 to 31 March, 2010. What is the last date on which audit report is required to be submitted to Commissioner.
Solution: XYZ Ltd. is required to get his accounts audited and obtain the report for financial year 1st April, 2009 to 31 March, 2010 till 30th Sept, 2010. Thereby, the last date for submission of audit report is 31st Oct, 2010.
- Notification for accounting year 2008-09
Registered dealers whose gross turnover in a year is Rs. 40 lacs or more and who are required to file prescribed audit reports before the concerned Assessing Authority and Commissioner Commercial Taxes, shall submit the prescribed audit reports for the Accounting year 2008-09 by 31st of October 2009 before the concerned Assessing Authorities and true copy thereof to the Commissioner Commercial Taxes.
- Judgement of auditor should be attached with the Statement of Accounts
The CA/ Cost and Works Accountant auditing the accounts shall express his opinion in explanatory note to be annexed to the statement, on points to which he does not agree. In respect of other points, he should certify that as per his opinion and according to information given to him by the dealer, the particulars contained in Trading/Manufacturing and P/L a/c and B/S are true and correct.
- Audit responsibility of auditor
Responsibilities of auditor are quite exhaustive. Basically auditor has to check any non-compliance of the provisions of Jammu & Kashmir GST Act or Rules especially if it relates to leakage of revenue.
Specifically following points are to be checked:
- B/S show true and fair view of state of affairs of the dealer as at the end of accounting period.
- P/L a/c show true and fair view of state of affairs of the dealer for period ending B/S date.
- B/S and P/L a/c are in agreement with books of accounts.
- Accounting Standard issued by Institute Of Chartered Accountants Of India should be followed.
- Auditing Standard issued by Institute Of Chartered Accountants Of India should be followed.
- Any Change in the nature of business of the dealer is to be reported.
- Any Change in the constitution of the dealer is to be reported.
- Books of accounts shall be maintained properly.
- Method of accounting followed. Any change in the accounting mechanism followed is also to be reported.
- Method of valuation of stock followed. Any change in the valuation of stock followed is also to be reported.
- Penalty is imposed, if fails to comply with the condition of statutory audit
If any dealer liable to get his accounts audited u/s 60(1)
- fails to get his accounts audited within 6 months from the end of the accounting year, or
- fails to furnish a true copy of the audit report to the Commissioner by the end of 1 month after expiry of the period of 6 months during which the audit would have been completed.
the Commissioner shall after giving such dealer an opportunity of being heard impose on him, in addition to any tax payable, a sum by way of penalty equal to 0.25% of the turnover as he may determine to the best of his judgment, in his case, in respect of the said period.
Notice of hearing u/s 60(3) shall be given in Form GST- 54.
Follow Us on
No comments:
Post a Comment