GST AUDIT
C O M P L I A N C E C H E C K L I S T
❦
Client & Engagement Details
This checklist covers the CGST Act, Rules and current CBIC notifications (FY 2025-26). Use the checkbox column to track completion and the remarks column to record observations, exceptions or follow-up items. Sections E and F provide a comprehensive Reverse Charge Mechanism schedule covering all major notified categories including freight (GTA), legal services, director remuneration, rent from unregistered landlord, purchase of iron/steel under Sec 9(4), and import of services.
☐Pending
✓Compliant
⊘Non-Compliant / Observation
A
Registration & Basic Profile
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Verify GSTIN registration certificate — legal name, trade name, PAN, business constitution | Sec 22/25 | ||
| 2 | All additional places of business / branches covered under correct GSTIN(s) | Sec 25(2) | ||
| 3 | All amendments (address, authorised signatory) filed timely on portal | Rule 19 | ||
| 4 | Cancellation / suspension history reviewed; ITC and liability impact assessed | Sec 29/30 | ||
| 5 | Aggregate turnover threshold checked — ₹20L (services) / ₹40L (goods); registration timely | Sec 22(1) | ||
| 6 | E-invoicing applicability — turnover threshold confirmed; IRN generated for B2B | Rule 48(4) | ||
| 7 | E-way bill applicability — generated for all taxable movement above ₹50,000 | Rule 138 |
B
Returns Filing & Reconciliation
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Reconcile turnover: Books vs GSTR-1 vs GSTR-3B vs GSTR-9 vs Audited Financials | GSTR-9 Tbl 5 | ||
| 2 | GSTR-9C reconciliation statement filed (turnover > ₹5 Cr) — self-certified | Sec 35(5)/44 | ||
| 3 | Reconcile ITC: Books vs GSTR-2B vs Electronic Credit Ledger vs GSTR-3B | Rule 36(4) | ||
| 4 | All returns (GSTR-1, 3B, 9) filed within due dates — late fees computed if any | Sec 47/50 |
C
Outward Supplies / Sales
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | GST correctly paid on all taxable outward supplies — verify nature, rate, classification | Sec 9 | ||
| 2 | Correct classification — taxable / exempt / nil-rated / non-GST / zero-rated | Sec 2(47) | ||
| 3 | HSN / SAC code and Place of Supply correctly determined | Sec 10-14 | ||
| 4 | Advances received against services — GST charged and adjusted on invoicing | Sec 12/13 | ||
| 5 | Exempt / nil-rated supplies — proportionate ITC reversal under Rules 42 & 43 | Rule 42/43 |
D
Inward Supplies, ITC & Expenses
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | ITC availed reconciled with GSTR-2B; only eligible ITC claimed | Rule 36(4) | ||
| 2 | Sec 16(2) conditions met — invoice, goods/services received, tax paid, return filed | Sec 16(2) | ||
| 3 | Blocked ITC under Sec 17(5) reversed — motor vehicles, food, club, personal use | Sec 17(5) | ||
| 4 | Rule 37 — ITC reversed where vendor not paid within 180 days; re-claimed on payment | Rule 37 | ||
| 5 | ITC on routine expenses (bank charges, legal, professional fees) not missed | Sec 16(1) |
E
Reverse Charge Mechanism — Applicable Supplies
Comprehensive list of supplies on which GST is payable by the recipient under Reverse Charge. Includes freight (GTA), legal services, director remuneration, rent from unregistered landlord, unregistered iron/steel purchase (Sec 9(4)), import of services, security, sponsorship and others. Verify each item for self-invoice, cash payment, ITC claim and GSTR-3B disclosure.
| # | Service / Supply | Supplier | RCM Payer | Rate | Done | Remarks |
|---|---|---|---|---|---|---|
| 1 | Goods Transport Agency (GTA) — road freight (5% forward charge not opted) | GTA | Any registered person | 5% | ||
| 2 | Legal services — advocate / firm / senior advocate | Advocate/Firm | Any business entity | 18% | ||
| 3 | Director's services — sitting fees, commission, professional fees | Director | Company / LLP | 18% | ||
| 4 | Insurance agent services | Insurance Agent | Insurance Company | 18% | ||
| 5 | Recovery agent services | Recovery Agent | Bank / NBFC / FI | 18% | ||
| 6 | Renting of motor vehicle (cab) — Sec 9(3) (5% forward charge not opted) | Any person | Body Corporate | 5% | ||
| 7 | Sponsorship services | Any person | Body Corp / Partnership | 18% | ||
| 8 | Services by Govt / Local Authority (excluding exemptions) | Govt / LA | Registered business | Applicable | ||
| 9 | Import of services from outside India (OIDAR, technical, professional) | Foreign Supplier | Recipient in India | Applicable | ||
| 10 | Renting of commercial immovable property — unregistered landlord to registered tenant (w.e.f. 18.07.2022) | Unregistered LL | Registered Tenant | 18% | ||
| 11 | Purchase of raw cotton from agriculturist | Agriculturist | Registered Dealer | 5% | ||
| 12 | Purchase of tobacco leaves / bidi wrapper from agriculturist | Agriculturist | Registered Dealer | 5% | ||
| 13 | Purchase of unregistered iron / steel / cement by promoter (Sec 9(4)) — real estate | Unregistered Supplier | Registered Recipient | Applicable | ||
| 14 | Security services — supply of security personnel | Agency | Body Corporate | 18% | ||
| 15 | Services by author / artist for transfer of copyright | Author/Artist | Publisher/Music Co. | 12%/18% | ||
| 16 | E-commerce operator services (transport, housekeeping, restaurant) — Sec 9(5) | Service provider | ECO liable | 5%/18% | ||
| 17 | Ocean freight on import (CIF) — paid to foreign shipping line | Foreign Shipping | Importer in India | 5% | ||
| 18 | Services by overseas commission agent / liaison office | Foreign Agent | Indian Principal | 18% | ||
| 19 | Business correspondent / business facilitator services | BC/BF | Banking Company | 18% | ||
| 20 | Lottery tickets — distribution by State Govt | State Govt | Distributor/Agent | 12%/28% | ||
| 21 | Used / scrap vehicles, seized goods sold by Govt | Govt / Dept | Registered Recipient | Applicable | ||
| 22 | Raw silk / cocoon / silk yarn from notified suppliers | Notified supplier | Registered Dealer | 5% |
F
RCM Compliance Verification Points
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Self-invoice raised under Sec 31(3)(f) for every RCM purchase | Sec 31(3)(f) | ||
| 2 | RCM tax paid in CASH only via electronic cash ledger | Sec 49(4) | ||
| 3 | ITC of RCM tax claimed in same / subsequent month after cash payment | Sec 16(2) | ||
| 4 | GTA freight — verify 12% forward charge declaration; otherwise 5% RCM applicable | Notif 11/2017 | ||
| 5 | Advocate / professional fees — RCM on retainers, appearance, drafting (not court fees) | Notif 13/2017 | ||
| 6 | Director remuneration / sitting fees — RCM on non-employee portion | Cir 140/10/2020 | ||
| 7 | Commercial rent from unregistered landlord — RCM @ 18% w.e.f. 18.07.2022 | Notif 05/2022 | ||
| 8 | Iron / steel / cement purchase from URD by promoter (real estate) — Sec 9(4) RCM | Notif 07/2019 | ||
| 9 | Import of services — IGST self-assessed and reported in GSTR-3B Table 3.1(d) | Sec 7(1)(b) | ||
| 10 | GSTR-3B Table 3.1(d) — total RCM inward supplies tallied with self-invoices and books | GSTR-3B | ||
| 11 | GSTR-9 Table 4G — RCM inward supplies disclosed; reconciled with GSTR-3B | GSTR-9 |
G
Exports & Zero-Rated Supplies
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Exports with payment of tax — refund of IGST claimed; shipping bill = refund application | Rule 96 | ||
| 2 | Exports without payment (LUT) — LUT validity (FY-wise), filing before export | Rule 96A | ||
| 3 | Export proceeds realised within prescribed time (9 months goods, 1 year services); BRC/FIRC obtained | Rule 96A(1) | ||
| 4 | SEZ supplies — zero-rated treatment; LUT filed; endorsed invoices from SEZ officer | Sec 16 IGST | ||
| 5 | Refund applications (RFD-01) filed within 2 years from relevant date | Sec 54 |
H
Job Work Transactions
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Goods sent for job work under delivery challan (Form GST ITC-04) | Rule 45 | ||
| 2 | Inputs returned within 1 year — else deemed supply with tax liability | Sec 143(1) | ||
| 3 | Capital goods returned within 3 years — else deemed supply with tax liability | Sec 143(2) | ||
| 4 | ITC-04 filed disclosing all goods sent / received from job worker | Rule 45(3) |
I
Capital Goods & Fixed Assets
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | ITC on capital goods — full credit availed in month of capitalisation | Sec 16 | ||
| 2 | Sale of capital goods — higher of (transaction value GST) or (ITC reversal per Rule 44) | Sec 18(6)/44 | ||
| 3 | Depreciation under Income Tax — claimed on cost EXCLUDING GST component | Sec 16(3) | ||
| 4 | Capital goods used for both taxable and exempt — Rule 43 reversal over 60 months | Rule 43 |
J
Other Income & Investments
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Sale of securities / shares — 1% of sale value treated as exempt turnover | Rule 45 expl | ||
| 2 | Interest income — excluded from exempt turnover for ITC reversal (banks/FIs exempt) | Rule 43 expl | ||
| 3 | Other miscellaneous income — scrap sale, insurance claim, liquidated damages — GST checked | Sec 7 |
K
Tax Payment, Utilisation & Ledgers
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Tax paid head-wise (CGST/SGST/IGST); utilisation order followed (IGST first) | Sec 49 | ||
| 2 | Rule 86B — minimum 1% tax in cash where turnover > ₹50L/month | Rule 86B | ||
| 3 | Interest @ 18% p.a. on delayed tax payment — computed and paid | Sec 50 | ||
| 4 | Electronic Cash, Credit and Liability ledgers reconciled at year-end | Sec 49 |
L
TDS / TCS under GST
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | GST TDS @ 2% u/s 51 — applicability checked (Govt depts on contracts > ₹2.5L) | Sec 51 | ||
| 2 | GSTR-7 filed monthly — TDS deposit and certificate issued to deductee | Rule 66 | ||
| 3 | TCS @ 0.5% u/s 52 — collected, deposited and reported in GSTR-8 | Sec 52 |
M
Branch Transfers / Related Party / Distinct Persons
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Stock transfers between branches (same PAN, different GSTIN) — invoiced with GST | Schedule I | ||
| 2 | Valuation as per Rule 28 — Open Market Value or 90% of recipient's onward sale price | Rule 28 | ||
| 3 | Cross-charge for HO common services to branches — proper invoice with apportionment | Sec 25(4) |
N
Sale on Approval Basis
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Goods sent on approval / sale-or-return — moved under delivery challan | Sec 31(7) | ||
| 2 | Tax invoice raised earlier of: confirmed supply OR 6 months from removal | Sec 31(7) | ||
| 3 | Goods not returned within 6 months — deemed supply, tax liability raised | Sec 31(7) |
O
Documents & Records to Keep Ready
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | GST registration certificate and all amendments | Rule 18 | ||
| 2 | Filed GST returns — GSTR-1, 3B, 9, 9C (with acknowledgements) | Sec 35 | ||
| 3 | Books of accounts, trial balance, P&L, Balance Sheet, audit reports | Sec 35(1) | ||
| 4 | Tax invoices, credit / debit notes, bills of supply, payment vouchers | Sec 31 | ||
| 5 | E-way bills and e-invoices — generated, archived, reconciled | Rule 138 | ||
| 6 | Bank statements and payment proofs (including BRC/FIRC for exports) | Rule 96A | ||
| 7 | Job work challans (ITC-04) and records of goods movement | Rule 45 | ||
| 8 | RCM self-invoices, payment vouchers, supplier confirmations | Sec 31(3) |
P
Miscellaneous & Special Checks
| # | Verification Point | Reference | Done | Remarks |
|---|---|---|---|---|
| 1 | Anti-profiteering — rate reduction / ITC benefit passed to customers | Sec 171 | ||
| 2 | Tax collected but not deposited — potential liability under Sec 76 | Sec 76 | ||
| 3 | Departmental scrutiny / audit u/s 61 / 65 — assessment orders complied with | Sec 61/65 | ||
| 4 | Refund claims (excess ITC / zero-rated) — status tracked, follow-up done | Sec 54 | ||
| 5 | Invoice numbering — unique serial per series, no breaks, FY prefix | Rule 46 |
Q
Auditor's Observations & Sign-Off
Summary of Key Observations
Recommendations for Management
Signature of Auditor
Signature of Client / Management
