GST AUDIT IN RAJASTHAN

GST AUDIT IN RAJASTHAN

1. Opinion By The Auditor

In the end Auditor gives his opinion that the information and explanations provided to us and the particulars given in Form ‘A’ are true and correct and annexed hereto.

If such person gets his accounts audited under such law before the specified date and furnishes the report within due date of such law then it is not required for the GST Auditor to give his opinion, as to whether or not the accounts give a true and fair view.

1. Part by Part analysis of ‘FORM-A STATEMENT OF PARTICULARS’

Analysis of Part-I ‘General Information’

In this part auditor has to mention dealers general information regarding Name, Address & phone No. of principal place of the business along with the full address of the branches, godowns and manufacturing units situated whether inside or outside the state of Rajasthan.

Auditor should also provide the TIN, CST, PAN, Central Excise Registration No., Service Tax Registration No. and other if any.

He has to mention the status of the dealer and the details regarding the status as it is very important to calculate his tax liability. In other words if it is not proprietary firm then he has to indicate name and address of the partner, director along with their share of interest.

He should fill in the details of nature of business and change therein it, list of Books of accounts maintained and examined, method of accounting and method of valuation of stock, bank account detail, statutory forms obtained by the department, detail of surveys conducted and detail of goods.

Analysis of Part-II-A ‘Manufacturing result’

Part II-A is specifically for the dealers engaged in the manufacturing process.

Auditor shall mention its opening and closing stock details bifurcating into:

• Raw Materials,
• Work-in-progress,

Auditor shall also provide the detail of purchase/receipt of goods used in the manufacturing and the purchase/receipts returned which includes:

• Purchase Intra state shall be broken into 3 parts:
  • Registered dealers under section 3(2) and section 5(1),
  • Other registered dealers; and
  • Unregistered dealers.
• Purchase Inter state under this clause auditor points out purchases from registered dealer or otherwise.
• Inter state Stock transfer/receipt under this auditor breaks it into Head Office or Branches.
• Import from outside the country.

Analysis of Part-II-B ‘Trading results of Manufactured Goods’

Part II-B is for the dealers engaged in the trading of manufactured goods.

Auditor shall mention its opening and closing details of finished goods manufactured.

Auditor shall also provide the detail of sales/stock transfer of goods which includes:

• Sales Intra state under this clause auditor points out sales against declaration forms or otherwise.
• Sales Inter state shall be broken into 4 parts:
  • Sales against Form “C”;
  • Sales against Form “D”;
  • Sales in transit;
• Inter state Stock transfer under this auditor breaks it into Head Office or Branches.
• Intra state Stock transfer
• Exports outside the country and
• Deemed export sales.

Analysis of Part-III ‘For Trading Activity only’

PART III is exclusively for the audit of dealers engaged in trading activity business.

It is the duty of the tax payer to provide the full fledge detail separately for both purchase/receipt of goods and the sales/stock transfer of Finished Goods and goods returned as opening and closing to auditor for the purposes of this part.

Auditor shall also provide the detail of purchase/receipt of goods used in the manufacturing and the purchase/receipts returned which includes:

• Purchase Intra state shall be broken into 3 parts:
  • Registered dealers under section 3(2) and section 5(1),
  • Other registered dealers; and
  • Unregistered dealers.
• Purchase Inter state under this clause auditor points out purchases from registered dealer or otherwise.
• Inter state Stock transfer/receipt under this auditor breaks it into Head Office, Branches or Consignment.
• Import from outside the country.

Auditor shall also provide the detail of sales/stock transfer of goods which includes:

• Sales Intra state under this clause auditor points out sales against declaration forms or otherwise.
• Sales Inter state shall be broken into 4 parts:
  • Sales against Form “C”;
  • Sales against Form “D”;
  • Sales in transit;
• Inter state Stock transfer under this auditor breaks it into Head Office, Branches or Consignment.
• Intra state Stock transfer
• Exports outside the country and
• Deemed export sales.

Analysis of Part-IV ‘Other Statements’

PART IV is very long part, it requires the auditor to check the following:

• Capital goods converted into stock in trade;
• Sale of fixed assets;
• Consignment sales;
• Transfer of right to use goods;
• Details of Works Contract;
• Input Tax Credit claimed during the year;
• Benefits availed under incentive/Deferment Scheme;
• Benefits availed under Rajasthan Investment promotion Scheme-2003,
• Miscellaneous Information and return wise sales summary.

Analysis of Part-V ‘Financial Results’

In this part auditor is required to provide summarized information as to calculation of:

• Tax Credit;
• Output tax;
• Total tax payable.

Statement of tax paid/refund under RGST and CST Act would also be required in this part.

• Analysis of the Second Form of the Audit Report

1. Applicability of Audit Report

This form of the Audit report is applicable in the case of the tax payer whose accounts of the business are not required to be audited by or under some other law. In other words if first form is not applicable then this form would be applicable for GST audit report.

1. Objective Behind GST Audit

The basic objective behind GST Audit is to control tax evasion or tax avoidance and to calculate the correct GST liabilities of the dealer.

It also helps to know whether the dealer is maintaining proper records and books of accounts as specified under the GST Act and Rules and properly follows them.   

1. Statement of Particulars

The Auditor should mention Name, Address and Registration Certificate No. of the dealer and also quote the PAN no. of the tax payer after proper verification.

1. Examination of Books of accounts

The auditor should examined whether the balance sheet and profit & loss account are maintained in agreement with the books maintained at the principal place of business and give his opinion  whether proper books are kept by the dealer as prescribed by the RGST Act, 2003.

1. Information & Explanations

The Auditor should obtained all the information and explanations which are necessary for the purpose of Audit which he is going to certify as true and correct as given in detail in Form ‘A’ statement of particulars covering all the parts of form and Balance Sheet and Profit and loss account.

The auditor gives his opinion that to the best of his knowledge and as per information and explanations provided to him, the said accounts gives a true and fair view:

• In the case of the Balance sheet, of the state of the affairs of the dealer as at 31st March and
• In the case of the Profit & loss account of the Profit/loss of the dealer for the year ended on that date,

1. Duty of the Auditor regarding ITC, Input Tax, Output Tax, Returns.

The duty of the auditor is also to check the correctness of the facts provided by the dealer:

• Correct calculation of tax on the prescribed rates of tax
• Returns are correctly filled up
• The set off input tax correctly claimed
• The payment of tax in time or late payment which attract the interest
• Late filing of the returns and penalty
• The purchases from unregistered dealers and purchase tax liability of the dealer
• Correct bifurcation of turnover of the dealer

1. Application of Accounting Standards

The auditor while conducting GST Audit should apply generally accepted practices of auditing as it provides him ease while auditing. He should check whether proper accounting standards are followed by the tax payer or not, whether the Internal control system is effective and also the materiality of the relevant transactions.

Follow Us on