The earlier indirect tax laws restricted audit by a chartered accountant to State VAT and Central State Tax laws of certain states. Likewise, Special Audit was suggested in the Central Excise and Service Tax. This took place only in cases where there was a doubt regarding undervaluation or excessive credit by the taxpayer.
These cases leading to audit by Chartered Accountants apply to the current GST law as well. Thus, the focus of the GST regime on self-assessment brings along multiple challenges. These challenges in the new GST law makes taxpayers prone to errors. This further leads to the unintentional drain of the government’s revenue.
So, the numerous compliances and the challenging tax laws in India make auditing of records necessary under various laws. GST too necessitates audit beyond certain turnover limits by tax professionals.
So let’s understand the meaning of GST audit, types of audit and persons who are required to get their accounts audited under GST.