Every person whose aggregate turnover from Supply of Goods or Services or both in a financial year exceeds INR 20 lakhs* (see note below) has to mandatorily register under Goods & Service Tax. This limit is set at INR 10 lakhs for North Eastern and hilly states flagged as special category states.
*Note : The basic limit beyond which obtaining registration becomes mandatory is increased from INR 20 lacs to INR 40 lacs for certain categories of persons, who are engaged in exclusive supply of goods vide notification No. 10/2019-Central Tax, dated 07.03.2019
Therefore, in case a person in supplying goods but also earns a nominal amount of service income (whether taxable or not) such as commission income, or interest income say from bank (which is exempt), then such person shall be liable to take registration above INR 20 lacs and not INR 40 lacs.
Every registered person must get its accounts audited by a Chartered Accountant / Cost Accountant if the aggregate turnover during FY exceeds INR 2 Crores from sale of goods or services.
Calculation of turnover shall be PAN (Permanent Account Number ) based i.e. all sale of goods/ services shall be taken for computing the limit of INR 2 Crores.
SGA, can always be trusted for as your GST Auditor in Pune and beyond for executing this complex task within a time bound manner.
GST Audit is required for the following reasons :
- GST is the self-assessment tax regime so GST audit is required for ensuring that tax payer has correctly assessed its liability.
- It involves examination and evaluation of records, GST rate, GST returns and other related documents.
- To obtain reasonable assurance and ensure that financial statements are free from any material misstatements.
- Annual Return
- Copy of Audited Annual Accounts
- Copy of Reconciliation Statement
For computing the aggregate turnover, following shall be included-
- Value of all inter-state taxable supply
- Value of all intra-state taxable supply
- Value of all exempt supplies
- Value of all export supplies
- Job work supplies on principal to principal basis
- Zero rated supplies
- Any supply to agent/ job work on behalf of principal
For computing the aggregate turnover, following shall be excluded-
- Taxable supply on which reverse charge is applicable
- All taxes and cess paid under GST
- Goods supplied and received back from job work.
- While computing the limit of INR 2 Crores, turnover of all the branches of an organization should be considered and if the cumulative turnover exceeds the limit of INR 2 Crores then every branch will be liable for GST audit irrespective of the fact that their individual turnover does not exceed the specified limit.
- Organization can appoint either the single auditor for all branches or separate auditor for each branch.
As per the GST Act, due date of audit and annual return is specified as 31st December of subsequent fiscal year and in case of failure in complying with the same then as per act no specific penalty is prescribed. So it will be covered under the head of general penalty of Rs. 25000.
For more information or any questions feel free to connect with Professional CA in Panchkula. You may also visit our website chartered accountants in panchkula.
Written on Aug. 10, 2020, 8:55 p.m.