Definitions & Analysis of Supply

Definitions & Analysis of Supply

GST Audit Baroda Branch of WIRC -CA. Yash Parmar Partner, Gabhawalla & Co. GST Audit- Steps & Timelines Audit Engagement Preparation for Audit Audit Execution Audit Conclusion Opening dialogue with the Auditee Documentation Review of Positions

Filing of Audit Report Consolidated or State Level? Reconciliation Verification of Data Way Forward Appointment Letter Format Taking corrective steps S. B. Gabhawalla & Co.

2 Understanding the Auditee/Checklist - Outward Supplies - Inward Supplies Input Tax Credit S. B. Gabhawalla & Co. Introduction Forced Errors Procedural Aspects 3

Introduction (1/2) Sr . Introduction 1 2 Brief Nature of Business of the Entity Number of Registrations obtained by the Entity (Normal, SEZ, ISD) Unregistered Domestic Branches Whether company has overseas branches? Invoicing Software Accounting Software/ ERP Other process software's (if any) GST software for return filing 3 4

5 6 7 8 S. B. Gabhawalla & Co. Auditee Auditors s Remarks Respon se 4 Introduction (2/2) Sr . 9 10 11

12 13 14 15 Introduction Auditee Auditors s Remarks Respons e Implementation Agency- Law Implementation Agency- IT Statutory Auditors Internal Auditors/ Control Process VAT Auditors Accounting/ Tax period IND-AS applicability S. B. Gabhawalla & Co.

5 Outward Supplies (1/4) Sr . 1 2 3 4 Introduction Billing Process: Bill From - Centralised/ Decentralised (Basis of deciding the same) Bill To - Centralised/ Decentralised (Basis of deciding the same) Customer Master Impact Whether any specific POS Rules are

applicable? Scope of Coverage: Sales (Part of topline) Other Income S. B. Gabhawalla & Co. Scrap Sales Auditee Auditors s Remarks Respon se 6 Outward Supplies (2/4) Sr . Introduction 4

Scope of Coverage: Asset Sales Asset Buybacks Notice Pay Recoveries Employee Recoveries Reimbursement of expenses Cost Sharing with Group Companies Penalties & Liquidated damages Commissions Interest on delay payment on supply of goods/services S. B. Gabhawalla & Co. Auditee Auditors s Remarks Respons e 7

Outward Supplies (3/4) Sr . 5 6 7 Introduction Timing of Coverage: Unbilled Revenue Advances Deferred Revenue Deemed Supplies: Branch Transfer of Goods Branch Transfer of Services HO to Branch Branch Transfer of Services Branch to HO

Exempted Supplies: Interest Income S. B. Gabhawalla & Co. Auditee Auditors s Remarks Respons e 8 Outward Supplies (4/4) Sr . 7 8 Introduction Auditee Auditors s

Remarks Respon se Exempted Supplies: Exempted Goods/Services, in general Intermediary Changes in Tax Rates, if any S. B. Gabhawalla & Co. 9 Inward Supplies (1/2) Sr . 1 2 Introduction

Notified RCMs: Advocates Directors Sponsorship Goods Transport Agency Government Payments Import of Services URD RCM: Position upto 13.10.2017 Employee Reimbursement taxed? Exemption upto Rs. 5,000/- considered HSN wise rate or General rate? S. B. Gabhawalla & Co. Auditee Auditors s Remarks Respon se 10

Inward Supplies (2/2) Sr . 3 4 Introduction Auditee Auditors s Remarks Respon se Expense Revenue Matching- Statewise Process of Booking the Invoice Tax auto calculated or manual? S. B. Gabhawalla & Co. 11

Input Tax Credit (1/2) Sr . 1 2 Introduction Auditee Auditors s Remarks Respon se Tax Credits: Identification Accounting GSTR 3B Reporting 180 days payment and reversal

Payment basis/ accrual basis of credit Blocked Credits: Identification Accounting GSTR 3B reporting Employee related credits S. B. Gabhawalla & Co. 12 Input Tax Credit (2/2) Sr . 3 4 5 Introduction

Expense Off Baskets: Provisional Ratio Calculation (IN/INS/CG) Final Ratio Calculation Impact of intermediary changes Vendor Reconciliation: In books but not in GSTR 2A- Position In GSTR 2A but not in books- Position State reporting errors Transition Credits: ST3 Credit/ER1 Credit July Credit/ ImpactS.in books & Co. B. Gabhawalla Auditee Auditors s Remarks Respon se 13

Forced Errors & Procedural Aspects Sr . 1 2 3 Introduction Output Side: Duplicate Invoice Purchase returns accounted as sales Discounts Reversal of credit accounted as output tax Inward side: Sales rejection accounted as ITC

Credit notes accounted as ITC Procedural Aspects: Job Work Export Compliances S. B. Gabhawalla & Co. Auditee Auditors s Remarks Respon se 14 Initial Documentation S. B. Gabhawalla & Co. 15 Documents (1/5)

Sr. 1 2 3 4 5 6 7 Particulars Signed Financial Statements along with Statutory Audit Report Detailed Schedule and Trial Balance Groupings for P&L Items in EXCEL Audit Adjustments between Trial Balance and P&L if any State Level Trial Balance Consolidation into Entity Trial Balance Transfer Pricing Report Internal Audit Report relating to GST / Systems Controls Excel Sheet of all Registrations and

Usernames/Passwords S. B. Gabhawalla & Co. Remar ks 16 Documents (2/5) Sr. 11 12 13 14 15 16 17 Particulars Remar ks

Branch Transfer Policy Document Written Opinions / Advises on GST Matters Direct Litigation / Advance Rulings Notices / Orders from GST Authorities if any List of Tax Codes and Tax Code wise Turnover Summary from Books List of Other Dimensions used in Accounting ERP/Software and the purpose Backdating in Accounting and Blocking of Transactions Policy S. B. Gabhawalla & Co. 17 Documents (3/5) Sr. 18 Particulars

Remar ks Sample Documents: Tax Invoices for each revenue stream for each State Credit Notes with Corresponding Tax Invoices Debit Notes Bill of Supply (if any) Delivery Challans Branch Transfer Invoices for each type Self Invoice for RCM (if maintained) Advance Receipt Voucher (if maintained) Advance Refund Voucher (if maintained) Payment Voucher for RCM (if maintained) Delivery Challan for Job Work (if maintained) LUT for Exports and SEZ Supplies S. B. Gabhawalla & Co. 18 Documents (4/5)

Sr. 19 Particulars Remar ks One month trail on record with process flow explanation: Trial Balance Sales Register Output Tax GL Working of GSTR 1 and 3B Reconciliation of Output Taxes Input Credit Register Working of Eligible Credit Reconciliation of Input Credit RCM Calculations Reconciliation of RCM calculations S. B. Gabhawalla & Co.

19 Documents (5/5) Sr. 20 21 Particulars Monthly summary of following GLs as per accounts: Output Tax GL Input Credit GL- Current/ Deferred/ Ineligible/ Others RCM Gls Any other GST related GLs GSTR Consolidations: Consolidated GSTR1 July to March 18 Consolidated GSTR3B July to March 18 Adjustments in GSTR1 April to Sept 18 (Amendments, DN , CN) GSTR1-GSTR3B Reconciliation and differences if

any S. B. Gabhawalla & Co. Remar ks 20 Form GSTR 9C GSTR 9C- Overview I. Part A- Reconciliation Statement II.Part B- Certification S. B. Gabhawalla & Co. 22 GST Audit Report : Format (Part B) Format I

Certification in cases where the reconciliation statement is drawn up by the person who had conducted the audit Format II Certification in cases where the reconciliation statement is drawn up by a person other than the person who had conducted the audit S. B. Gabhawalla & Co. 23 Issue Under following circumstances, which format is ABC & Co, a CA firm suppose to use while conducting GST Audit of XYZ Ltd.?

1. ABC & Co. has conducted Statutory Audit of XYZ Format Ltd. I Format 2. ABC & Co. has conducted Tax Audit of XYZ Ltd. II Format 3. ABC & Co. has conducted Cost Audit of XYZ Ltd.No II 4. ABC & Co. is Internal Auditor of XYZ Ltd. Audit S. B. Gabhawalla & Co. 24 Issue Under following circumstances, which format is ABC & Co, a CA firm suppose to use while conducting GST Audit of XYZ, a proprietary

concern? Format 1. ABC & Co. has conducted Tax Audit of XYZ 2. ABC & Co. has conducted Cost Audit of XYZ 3. ABC & Co. is Internal Auditor of XYZ S. B. Gabhawalla & Co. I Format II No Audit 25 Issue XYZ, a proprietary concern is following cash system of accounting. The turnover is below the prescribed limits for getting books audited under Income Tax Act. However, for GST Audit purposes, the turnover is

exceeding the prescribed limit. How should ABC & Co., a CA firm proceed for GST Audit &Format which format to adopt? I Format 1. Audit under GAAP by ABC & Co. II 2. Audit under GAAP by other CA firm S. B. Gabhawalla & Co. 26 Comparison of Formats Format I Format II 1. Examined the balance sheet, P&L and Cash Flow

1. Enclose BS, PL, CF & annexures 2. Maintained books of accounts, records and documents required under the GST Law 2. Maintained books of accounts, records and documents required under the GST Law 3(a) Report observations/comments/discrep ancies 3(b) Report that A. Obtained all information necessary B. Proper Books of Accounts are maintained C. BS PL and CF in agreement with books 4. Financials and Reconciliation 3. Financials and Reconciliation

S. B. Gabhawalla & Co. 27 Comparison with Tax Audit Format I Form 3CB 1. Examined the balance sheet, P&L and Cash Flow 1. Examined the balance sheet, P&L 2. Maintained books of accounts, records and documents required under the GST Law 2. BS PL and CF in agreement with books 3(a) Report observations/comments/discrepancies

3(a) Report observations/comments/discrepancies 3(b) Report that A. Obtained all information necessary B. Proper Books of Accounts are maintained C. BS PL and CF in agreement with books 3(b) Report that A. Obtained all information necessary B. Proper Books of Accounts are maintained C. True and Fair View 4. Financials and Reconciliation attached 4. Particulars enclosed 5. Particulars in 9C are true and correct subject to observations

5. Particulars in Form 3-CD are true and correct subject to observations S. B. Gabhawalla & Co. 28 Clause-by-Clause analysis of GSTR 9C - Instructions - S. B. Gabhawalla & Co. Issues Technical Guide

29 Over-view of GSTR 9C (Part A) Part I II III IV V Description Basic Details Reconciliation of T/o declared in audited Annual Financial Statement with T/o declared in Annual Return (GSTR 9) Reconciliation of Tax Paid Reconciliation of Input Tax Credit Auditors recommendation on additional tax liability due to non-reconciliation S. B. Gabhawalla & Co.

30 Pt. II- 5A- Turnover Clause 5A: Turnover (including exports) as per audited financial statements for the State / UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement) Instructions: The turnover as per the audited Annual Financial Statement shall be declared here. There may be cases where multiple GSTINs (State-wise) registrations exist on the same PAN. This is common for persons / entities with presence over multiple States. Such persons / entities, will have to internally derive their GSTIN wise turnover and declare the same here. This shall include export turnover (if any). It may be noted that reference to audited Annual Financial Statement includes reference to books of accounts in case of persons / entities having presence over multiple States. S. B. Gabhawalla & Co. 31

Issue 1: (Clause 5A) XYZ Ltd. has presence in 3 states with break-down of turnover as under: MaharashtraGujaratDelhi- Rs. 75 lacs Rs. 1 Crore Rs. 3 Crores XYZ Ltd. needs to get his books audited only in Delhi or in all the 3 states? S. B. Gabhawalla & Co. 32 Statutory Provisions Section 44(2) of CGST Act, 2017: Every registered person who is required to get his accounts audited in accordance with the provisions of section 35(5), shall furnish annual return as per section 44(1) alongwith a copy of audited annual accounts and a reconciliation statement

Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of audited accounts, the reconciliation statement u/s. 44(2) and such other documents in such form and manner as may be prescribed Rule 80(3)- Reconciliation statement in form GSTR 9C if aggregate turnover exceeds Rs. 2 Crores in a financial year S. B. Gabhawalla & Co. 33 Turnover Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of audited accounts, the reconciliation statement u/s. 44(2) and such other documents in such form and manner as may be prescribed Turnover- Not defined in the Act Aggregate Turnover- Section 2(6)- PAN India Turnover Turnover in State- Section 2(112)- Turnover within the State

Every registered person to be read qua the Company or qua the distinct persons? Rule 80(3) talks of Aggregate Turnover- Can rule S. B. Gabhawalla & Co. 34 override section? Issue 2: (Clause 5A) ABC Ltd. for the period April 2017 to March 2018 has following turnover: April to June 2017- Rs. 75,00,000 July to March 2018- Rs. 1,50,00,000 Total- Rs. 2,25,00,000 Whether ABC Ltd. is required to get GST Audit done?

S. B. Gabhawalla & Co. 35 ICAI- Technical Guide (Pg. 4) For the financial year 2017-18, the GST period comprises of 9 months whereas the relevant section 35(5) uses the expression financial year. Therefore, in the absence of clarification from government, also to avoid any cases of default, it is reasonable to understand that to reckon the turnover limits prescribed for audit i.e., Rs. 2 crores one has to reckon the turnovers for the whole of the financial year which would also include the first quarter of the financial year 2017-18. However, if taxpayer were to take a view that the threshold of Rs. 2 Crore ought to consider transaction for 9 months since implementation of GST is from 1 July, 2017, suitable disclosure or intimation to the jurisdictional officer in S. B. Gabhawalla & Co.

36 writing, would be merited. Issue 3:Case: (Clause 5A) Facts of the Turnover of A Ltd. is Rs. 250 crores PAN India. You are appointed GST Auditor only for the state of Maharashtra and as per the State PL of Maharashtra, the turnover of Maharashtra is Rs. 30 crores Issues to discuss: 1. Whether the auditor should insist on audited/certified State PL from Statutory Auditor for the 9 months period or MRL will do? 2. What is the responsibility of the auditor to ensure that the

balance Rs. 220 crores is reported in other States? 3. What would happen if through genuine error, a turnover of Rs. 1 crore attributable to Maharashtra is wrongly reported in some other State?S. B. Gabhawalla & Co. 37 ICAI- Technical Guide (Pg. 23) It is possible that different Auditors are appointed for certifying GSTR 9C for different registrations of the entity. As multiple Auditors are involved in certification of the GSTR 9C, the Registered Person and every Auditor must ensure that the turnovers declared by different Auditors must reconcile and add-up to the total turnover of the entity as per the audited financial statements. Drawing analogy from SA 299 on Responsibility of Joint Auditors, an Auditor must communicate with the other Auditors to obtain details of turnover declared by him to ensure that the various turnovers declared by them. Alternatively, a suitable management representation may be obtained from the entity

that such turnovers declared by different Registered Persons aggregate to the audited financial statements. Such an Gabhawalla & Co. 38 exercise would also beS. B. required where multiple registrations Issue 4: (Clause 5A) Whether turnover at include the following? Clause 5A will Other Income reported in credit side of P&L Expense Recoveries on which tax is paid (reflected as reduction in debit side of P&L)

Sale of Assets (partially reflected as reduction in Fixed Asset Schedule and partially as profit in P&L) S. B. Gabhawalla & Co. 39 ICAI- Technical Guide (Pg. 22) While considering the turnover from the audited financial statements, the Auditor is also required to include indirect income in the form of dividend, interest, forex fluctuation, profit on sale of asset etc. Any amount of return supplies credited to purchase or expenditure account would not be considered for the purpose of arriving at the turnover under Sl. No. 5A. Such adjustment has been separately dealt with under appropriate Sl. No. in this Part. S. B. Gabhawalla & Co. 40

Issue 5: (Clause 5A) How to disclose turnover in cases where turnover has no correlation with GST Liability? Cash System of Accounting Builders and Developers Commission Agents S. B. Gabhawalla & Co. 41 ICAI- Technical Guide (Pg. 22) Turnover to be declared under this Sl. No. must flow from the audited financial statements even if such turnover consists of adjustments/ revenue recognition on account of a requirement of an Accounting Standard (E.g.: AS 7 in case of Construction Contracts). It cannot and must not include Deemed supplies under Schedule I as Sl. No. 5D separately

covers such adjustments. S. B. Gabhawalla & Co. 42 Pt II- 5B & 5H- Unbilled Revenue Clause 5B Unbilled revenue at the beginning of Financial Year (+) Clause 5H Unbilled revenue at the end of Financial Year (-) Instructions: Unbilled revenue which was recorded in the books of accounts on the basis of accrual system of accounting in the last financial year and was carried forward to the current financial year shall be declared here. In other words, when GST is payable during the financial year on such revenue (which was recognized earlier), the value of such revenue shall be declared here.

(For example, if rupees Ten Crores of unbilled revenue existed for the financial year 2016-17, and during the current financial year, GST was paid on rupees Four Crores of such revenue, then value of rupees Four Crores rupees shall be declared here) S. B. Gabhawalla & Co. 43 Issue 6: (Clause 5B) Should Clause 5B consider beginning of Financial Year or 1 July 2017? Unbilled revenue as on 31.03.2017 100 Invoiced before 30 June 2017 Invoiced between 1st July 2017 to 31st March 2018 Invoiced after 1st April 2018

50 30 20 Option I 5B. Opening unbilled revenue (April/July) 5G. April to June 2017 (Billing/Turnover) 5H. Closing unbilled revenue 5A. Turnover for CY S. B. Gabhawalla & Co. 100 -50 -20 30 Option II 50 0 -20 30

44 ICAI- Technical Guide (Pg. 26) Unbilled revenue would appear in the profit and loss account of the previous year. In order to get information of unbilled revenue at the beginning of Financial Year, reference may be had to previous years audited financial statements. However, as GST was introduced from 1st July 2017 one needs to be careful to exclude invoices raised during the period April 2017 to June 2017 from the computation. The expression financial year for 2017-18 has already been explained above to be 9 months period commencing 1 July, 2017, the value under this clause must be reckoned as at 1 July, 2017 S. B. Gabhawalla & Co. 45 Issue 7: (Clause 5B & 5H) An amount of Rs. 10,00,000/- was recorded and reported as Unbilled Revenue by the Statutory Auditor as on

31.03.2018 but as per Time of Supply provisions under GST, invoice should have been raised prior to 31.03.2018. To what extent the GST Auditor should examine the provisions of ToS? Or should he simply rely on Statutory Auditors judgment? S. B. Gabhawalla & Co. 46 ICAI- Technical Guide (Pg. 28) Disclosure: Reliance has been placed on the audited financial statements for determining the unbilled revenue and no separate exercise is conducted to validate the same. S. B. Gabhawalla & Co. 47 Pt II- 5C & 5I- Advances

Clause 5C: Unadjusted advances at the end of the Financial Year (+) Clause 5I : Unadjusted Advances at the beginning of the Financial Year (-) Instructions: Value of all advances for which GST has been paid but the same has not been recognized as revenue in the audited Annual Financial Statement shall be declared here. S. B. Gabhawalla & Co. 48 Issue 8: (Clause 5C & 5I) Interpretation

of Deposits vs. Advances whether required or rely upon Statutory Auditors judgment? Advances for Goods , whether disclosure required? Advances for Services, tax not discharged, whether disclosure required? S. B. Gabhawalla & Co. 49 ICAI- Technical Guide (Pg. 36) In case of advance for goods, auditor has to examine whether auditee has discharged tax on advances till

15.11.2017 Advances even if not considered in GSTR 1 and 9 shall be added to turnover here Advances in the nature of financial transactions (deposits/loans) to be identified and ignored S. B. Gabhawalla & Co. 50 Pt II- 5D- Deemed Supplies Clause 5D: Deemed

Schedule I (+) Supply under Instructions : Aggregate value of deemed supplies under Schedule I of the CGST Act, 2017 shall be declared here. Any deemed supply which is already part of the turnover in the audited Annual Financial Statement is not required to be included here. S. B. Gabhawalla & Co. 51 Issue 9: (Clause 5D) Common Employee cost, Branch Transfer not done by the assessee. Whether Auditor should

provide his interpretation and disclose the value in reconciliation with addition in liability or should rely upon assessees judgment? S. B. Gabhawalla & Co. 52 Pt II- 5E/5F/5J- Trade Discount & Credit Notes Clause 5F : Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST (+) Clause 5J : Credit notes accounted for in the audited Annual Financial Statement but are not permissible under GST (+)

Clause 5E : Credit Notes issued after the end of the financial year but reflected in the annual return (-) S. B. Gabhawalla & Co. 53 Statutory Provisions S. 34(1)- Credit Note can be issued only in following cases: 1. Taxable Value or Tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply 2. Goods supplied are returned 3. Goods/Services are found to be deficient S. B. Gabhawalla & Co. 54 Issue 10: (Clause 5E & 5J) Conditions for allowability of Credit Notes to be

checked? Practically, for amending transactions from B2C to B2B, CNs are being issued. S. B. Gabhawalla & Co. 55 Pt II- 5G- Pre-GST Turnover Clause 5G : Turnover from April 2017 to June 2017 (-) ICAI Guidance Note- The Turnovers declared in Excise, VAT and Service Tax returns should match with this, subject to POT differences S. B. Gabhawalla & Co. 56

Issue 11: (Clause 5G) The assessee being a service provider had obtained centralized registration in the Service Tax regime. It is difficult to provide state-wise turnover details of the pre-GST regime (April 2017 to June 2017). How to disclose pre-GST turnover in such cases? Will this clause include invoices/CNs of the erstwhile law but issued in post GST regime bearing pre-GST references? S. B. Gabhawalla & Co. 57 Pt II- 5K, 5L, 5M & 5N- Specific Adjustments & Valuation

Clause 5(K)- Adjustments on account of supply of goods by SEZ units to DTA Units (-) Clause 5(L)- Turnover for the period under composition scheme (-) For the period prior to the opting out of composition Whether consequential impact on credit claims to be verified? Clause 5M- Adjustments in turnover under section 15 and rules thereunder (+/-)

Margin Scheme for Second Hand Dealers Presumptive Value for Foreign Exchange Dealers Reimbursement of Expenses Clause 5N- Adjustments in turnover due to foreign exchange fluctuations (+/-) S. B. Gabhawalla & Co. 58 Pt II- 5O- Other Adjustments Could be many (Residuary Clause) Sale of Assets Wrong / Duplicate Entries in GSTR9 Delayed Credit Notes / Adjustments

S. B. Gabhawalla & Co. 59 Pt. II- 6- Reasons for unreconciled difference in Gross T/o Reporting Requirement: Top 3 reasons or we can add ? No quantification Any text or standard text options? S. B. Gabhawalla & Co. 60 Pt. II- 7- Reconciliation of Taxable T/0 Clause 7B: Value of Exempted, Nil Rated, Non-GST supplies, No-Supply turnover

Sale of Securities / Interest/ Land (not primarily reflecting in P&L) Clause 7C : Zero rated supplies without payment of tax Clause 7D: Supplies on which tax is to be paid by the recipient on reverse charge basis S. B. Gabhawalla & Co. 61 Issues to discuss Interest

Income which is an Exempt Income, ideally should have been reported in exempt section of GSTR 1. The same was not disclosed and not forming part of GSTR 9 as well. Now in GSTR 9C, assuming Clause 5A is only topline number, should this interest income then be added in clause 5O and reduced from clause 7B? or it should be ignored completely? (Clause 7B) What is the difference between Non-GST and NoSupply Turnover? What all transactions can it include? (Clause 7B) S. B. Gabhawalla & Co. 62 Issues to discuss Whether Place of Supply provisions to be checked for Zero-rated transactions? (Clause 7C)

Wrong classification of transactions (Taxes reported correctly). For eg. Exempt supply reported as Zerorated supply in GSTR 1 & 9. Should auditor make any comment in GSTR 9C? (Clause 7) S. B. Gabhawalla & Co. 63 ICAI- Technical Guide Examine the existence and validity of LUT obtained for the Zero-rate supplies made. Following supplies should be reported as regular supply: Zero- rated supplies, if conditions for exports are not fulfilled. Non-compliance of conditions for claiming exemptions. S. B. Gabhawalla & Co. 64

Pt. III- 9- Reconciliation of rate wise liability S. B. Gabhawalla & Co. 65 Issues to discuss Wrong classification of Tax components (Turnover reported correctly) Eg: SEZ supply, CGST & SGST is reported instead of IGST in GSTR-1 (was accepting initially) and not amended, similarly IGST supply tax paid as CGST/SGST. Whether this requires reporting? (Clause 9) Rate of Tax incorrectly charged and reported. Is it the auditors responsibility to verify and vouch for

rate of taxes for all the goods & services? (Table 9) S. B. Gabhawalla & Co. 66 ICAI- Technical Guide It is suggested that details in Table 5A to 5O should be compiled month-wise and rate wise Auditor needs to obtain a confirmation from the assessee that tax liability under RCM has been booked in accounts in compliance with Time of Supply. The Auditor could rely on reports or workings of the dates on which entries of inward supplies are made in the books of accounts for determining tax liability under RCM. Otherwise, Auditor should report that it was not possible to identify Time of Supply. A

separate working for monthly reconciliation of value of taxable inward supply with books should be prepared and kept as part of working papers by the Auditor so as to deduce the rate wise GST Liability under RCM. Monthly reconciliation will help in determining interest liability, if any. S. B. Gabhawalla & Co. 67 ICAI- Technical Guide A disclaimer can be given in opinion paragraph if Auditor is unable to identify or comment upon each and every classification of outward and inward supplies The Auditor should put a qualification in opinion paragraph for interpretation differences between assessee and Auditor The Auditor should recommend additional tax liability if any, if

dispute (between assessee and Auditor) is due to error but not a conscious interpretation S. B. Gabhawalla & Co. 68 Pt. III- 11- Additional amount payable but not paid S. B. Gabhawalla & Co. 69 Thank You CA. Yash Parmar Partner, Gabhawalla & Co. Mobile: +91- 9167615445 Email: [email protected]

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