MESSAGE FROM PRINCIPAL CHIEF COMMISSIONER
It gives me great pleasure to introduce Primer on Analysis of Financial
Statements for GST Audit, a comprehensive resource designed to assist
departmental officers in conducting effective and systematic GST audits.
The role of GST audit is critical in ensuring compliance, detecting discrepancies,
and preventing revenue leakage. A thorough understanding of financial
statements is essential for auditors to assess the accuracy of turnover declared,
input tax credit availed, and other key financial components relevant to GST
compliance.
This primer has been meticulously structured to provide a clear and practical
approach to analyzing financial documents. It serves as a ready reference for
departmental officers by offering insights into financial statement components
such as the balance sheet, profit and loss account, annual reports, and cost audit
reports. It highlights the key checks to be done, common discrepancies and best
practices to streamline the audit process. Additionally, it provides guidance on
reconciling financial records with GSTR 9C, a crucial aspect of GST audit.
I encourage all officers to make full use of this resource to improve their skills in
analyzing financial statements, ensure tax compliance and uphold the integrity of
the taxation system.
I commend the author for compiling this valuable guide and trust that it will serve
as an indispensable tool for departmental officers in their audit responsibilities. I
also congratulate Shri.K.Ramakrishnan, Commissioner, GST and Central Excise
Audit, Coimbatore and his entire team of officers for coming out with this primer.
Dr. Ram Niwas, IRS
Principal Chief Commissioner
FOREWORD
The ever-evolving landscape of taxation demands precision, vigilance,
and a deep understanding of financial statements. The introduction of
the Goods and Services Tax (GST) regime in India has transformed the
way businesses manage tax compliance, and with it comes the crucial
responsibility for GST Audit. This Primer on Analysis of Financial
Statements for GST Audit serves as a comprehensive guide to navigate
the financial statements for verification with reference to CGST Act,
2017.
GST audit is essential in ensuring transparency, accuracy and
compliance with GST law. A well-structured audit relies on the
meticulous examination of financial statements various other records.
Understanding these statements, their components and their
verification is critical for departmental officers engaged in GST audit.
This primer provides a structured approach to analyse financial
statements with a focus on GST compliance. It explains key financial
concepts, outlines the key checks to be done in balance sheets and
profit and loss accounts. Additionally, it delves into important elements
such as GSTR 9C reconciliation, cost audit reports, income tax audit
reports and the implications of various transactions under GST law.
The content is presented in a manner that facilitates easy reference
and practical application, making it an indispensable resource for
departmental officers dealing with GST audit.
I request all officers to make full use of this book and integrate its
insights into their audit processes. Let us work together to uphold the
principles of accuracy, fairness, and accountability in our audit
practices.
K Ramakrishnan, IRS
Commissioner
GST Audit Commissionerate
Coimbatore
