GST Audit Format | Amendments in Budget 2020-21

Description: GST audit format details are changed after financial act 2021. Read our blog to know about GST audit process.

  • According to Section 2(13) of the CGST Act, 2017, GST Audit can be defined as the examination of the returns filed by the taxpayer, the documents furnished, and other relevant details provided by the taxpayer.

  • This short article will discuss the GST audit details for the FY 2020-21 and the GST audit format for the same.

  • We will also look at some of the essential sections from the CGST Act & CGST Rule pertaining to the GST audit procedure.

  • We will discuss some of the amendments in the GST audit format and how they will impact the GST auditing process, which the taxpayers currently follow.

Who is eligible for GST Audit?

To understand the taxpayers' eligibility for GST auditing, we will refer to Section 44(2) & Section 35 (5) of the CGST Act, 2017.

Look at the following table to understand the taxpayers' eligibility according to the type of audit.

GST Audit Type




GST Audit – based on the threshold limit


Section 35(5) of the CGST Act


The registered taxpayers with an aggregate turnover above 2 Crore must be audited by the tax professionals.


Departmental Audit


Section 65 of the CSGT Act – General Audit               


This audit is ordered by the tax commissioner and will be conducted by tax authorities.


Departmental Audit


Section 65 of the CSGT Act – Special Audit


This audit is ordered by the Deputy/Assistant Commissioner & will be conducted by CA or CMA nominated by the commissioner.

This article shall further discuss in detail the 'GST Audit- based on the threshold limit’ and the amendments done to the rules pertaining to it.

It is necessary to comply with the GST rules and laws to avoid any further tax complications and stay away from any tax frauds.

One such example is Input Tax Credit under GST. Claiming 100% eligible ITC under GST is the dream of every taxpayer & it's the right of every taxpayer as well. However, taxpayers are advised to use the proper and ITC reconciliation software to stay 100% compliant with the GST rules and claim 100% of their eligible Input Tax Credit.

Provisions for GST Audit before Budget 2021

Following are the rules which were associated with the GST Audit:

  • Section 35(5) of the CGST Act;

  • Section 44(2) of the CGST Act; and

  • Rule 80(3) of the CGST Rules.

To make things simpler, let me give you an eagle's eye view of all these rules in the below-mentioned points:

  • Any taxpayer having an annual aggregate turnover exceeding INR 2 Crore is eligible for a GST audit [w.r.t Rule 80(3)].

  • These eligible taxpayers are mandated to get their audit done from Chartered Accountants or the Cost Accountants [w.r.t. Section 35(5)].

  • When a taxpayer files his annual returns (GSTR-9), he is required to furnish the following details:

    1. A certified audit copy of the annual accounts.

    2. Reconciliation statement (GSTR-9C) duly signed by the GST Auditor.

So before the Budget of 2021, it was mandatory for:

  1. Taxpayers to file their ‘annual returns’ via GSTR9 were to be digitally signed by the taxpayers or through the OTP. AND

  2. They were also required to file a 'reconciliation statement’ in GSTR-9C, also called 'GST Audit'; this was to be digitally signed by the Chartered Accountant or the Cost Accountant and signed and uploaded by the GST Auditor.

These provisions are now amended in the Finance Act, 2021.

GST Audit format after amendments in FY 2021-22

Following are the changes which were introduced in the Finance Act of 2021 in the GST audit format:

  1. Subsection 5 of Section 35 is omitted

  2. Substitution of Section 44

Let us understand the impact of these amendments on the GST audit format.

What does the omission of Section 35 (5) mean?

This section mandated the taxpayers whose annual aggregate turnover is above 2 Crore to get their returns audited by a Chartered Accountant or a Cost Accountant.

After omission of this section, e requirement of getting the books of accounts audited by the professionals (i.e. either Chartered Accountant or Cost Accountant) is now altogether scrapped.

What is the meaning of the newly added Section 44?

As per Section 44, the taxpayers are now required to:

  1. File an annual return

  2. Furnish the documents: Self-certified reconciliation statements & audited annual financial statement.

Following are the types of taxpayers who are NOT required to file an annual return under Section 44:

  1. Input Service Distributor (ISD)

  2. Non-resident taxable entity

  3. The person whose tax is being deducted at source (TDS) (w.r.t Section 51)

  4. The person who collects tax at source (w.r.t Section 52)

  5. A casual taxpayer

  6. To the central & state government or local authorities considering that they will be audited by the Comptroller and Auditor General of India (CAG) or any other appointed auditor as and when required.

NOTE:  The effective dates of these amendments are still NOT declared by the government. Hence, these changes will come into effect after the effective date is announced.

You can use some superfast & automated GST filing software offered by government-appointed GST Suvidha Provider (GSP) GSTHero, which is currently helping 10,000+ businesses to comply with the GST compliances and get 100% eligible Input Tax Credit and also make other GST return filings simple.

To Summarize

  1. The new amendment removes the compulsion to audit the books of accounts of the taxpayers by the tax professionals based on the threshold limit of INR 2 Crore.

  2. The previously mandated requirement to file a reconciliation statement via the GSTR-9C form and signed by a Chartered Accountant or a Cost Accountant, is now removed.

Now, after these amendments come into effect, the taxpayers will have to:

  • Furnish the annual returns

  • Submit a self-certified reconciliation statement

  • Submit the annual financial statement audited by the GST auditor (Chartered accountant or the Cost Accountant).

Stay updated; stay ahead!

Until the next time...


GST audit format, GST audit, GST audit procedure, input tax credit, GST filing software, audit under GST
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