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General points to be considered for GST Audit

Reconciliation of statements

  • Reconciliation of Books with GST Returns : Reconciliation of outward and inward supply data filed in the GST Returns (transaction wise) with the actual financials should be reconciled. 
    The activity will help in identifying the variance (if any) and to incorporate necessary amendments in the returns to be filed.
  • Matching of Input Tax Credit of Books of accounts and GSTR 3B : Reconciliation of ITC availed in the Books vs. GSTR 3B should be done month wise and timing difference and value difference if any, should be identified and appropriate action to be taken.
  • Matching of Input Tax Credit of GSTR 3B with GSTR 2A : Month wise reconciliation of ITC (B2B) availed in GSTR 3B Vs. ITC auto-populated in Form GSTR2A should be done.


  • Refund of excess ITC : Unlike the refund provision in the existing regime, a registered person making normal taxable supply cannot claim refund of unutilized ITC. The same has to be compulsorily carried forward to the next tax period.
  • Refund of excess payment (unutilized amount in electronic cash ledger): Taxpayers having excess balance in electronic cash ledger which is not planned to be utilised in the near future may be claimed as refund. Further appropriate treatment in accounting records should be given.

Reversal of input tax credit

  • Check the difference between invoice date and date of payment, this would not exceed 180 days. 
  • The amount of payment needs to remain equal with invoice amount and GST. If the payment amount is less than invoice amount plus GST, the input tax credit to the extent of short payment would get reversed.

Interest and penalties in GST Act

  • Recipient could claim extra Input Tax Credit and for this, it is compulsory for him to make a payment of interest @ 24% p.a. This is applicable on the excess tax amount. Auditors need to reconcile the GSTR 3B with GSTR 2A to make sure that the organization would not claim extra tax credit. If it has been paid in excess, company would pay interest and the tax amount on the applicable date. 
Author: Niranjan Reddy

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