Applicability of GST Audit

Rule 80(3) of CGST Rules uses the expres­sion “every reg­is­tered per­son whose aggre­gate turnover dur­ing a finan­cial year exceeds two crore rupees”.

  • So GST Audit is Applic­a­ble for every Reg­is­tered per­son, whether or not the per­son is hav­ing any Tax­able sup­ply dur­ing the year. There­fore a per­son hav­ing non tax­able sup­ply of more than Two crore Rupees dur­ing the year and hav­ing GST Reg­is­tra­tion, needs to get GST Audit done.

To cal­cu­late Aggre­gate Turnover fol­low­ing Points are impor­tant:

  • Aggre­gate turnover is PAN based while turnover in a State / UT, though sim­i­lar­ly word­ed , is lim­it­ed to turnover in a State / UT, which is lim­it­ed to a State; It is there­fore, rea­son­able to inter­pret that the word turnover used in Sec­tion 35(5) ought to be under­stood as aggre­gate turnover.
  •  The Turnover to be cal­cu­lat­ed for the whole Finan­cial Year of 2017.18. For the finan­cial year 2017–18, the GST peri­od con­sists of 9 months where­as the rel­e­vant Sec­tion 35(5) uses the expres­sion finan­cial year; There­fore, in the absence of clar­i­fi­ca­tion from the gov­ern­ment, and to avoid any cas­es of default, it is rea­son­able to under­stand the turnovers for the whole of the finan­cial year which would also include the first quar­ter of the finan­cial year 2017–18.

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