12 issues which may lead to GST Audit by Tax authorities

Issues which may lead to GST Audit by Tax authorities

The first step in creating an audit program is to develop an audit plan. Following points will be considered by GST Officer while selecting Taxpayer for GST Audit under Section 65 of CGST Act.

How the issues are pin-pointed for an audit plan is illustrated below:-

(a) Under-valuation of taxable goods by excluding any specific component of gross amount charged.

(b) Suspected discounts.

(c) Misclassification between taxable and non taxable goods.

(d) Admissibility aspect in respect of capital goods for which ITC was availed.

(e) Discrepancy/deficiencies in billings evident from materials received from enforcement or otherwise.

(f) Low gross profit which is not in tune with the line of business.

(g)IPT/OPT ratio which is more or less equals to 1 for the last two years

(h) E-waybill transactions not accounted/ Unusual cancelation of e-waybills.

(i)Purchase or sales invoices not accounted.

(j)Unusual movement pattern of goods as per E-waybill/delivery chalan vis – a vis return particulars

(k) Variations between annual return with audited statements

(l) Information received from external agencies including Banks.

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