Common issues found during GST audits can significantly impact businesses if not handled properly. Taxation Legal Advisor (https://taxationlegaladvisor.in , +91 90342 63307 provides expert guidance to navigate these challenges effectively.
Common Issues Found During GST Audits and Their Solutions
- Mismatch in Input Tax Credit (ITC) Claims
Auditors extensively cross-check ITC claimed by the taxpayer against the supplier’s filings (GSTR-2A/2B). Discrepancies arise from claiming ITC on ineligible items, blocked credits, or non-reported invoices.
Solution: Regularly reconcile ITC claims with supplier data and avoid claiming credits on blocked or personal expenses. - Differences Between GSTR-1 and GSTR-3B
Outward supplies reported in GSTR-1 must align with the tax declared in GSTR-3B. Any mismatch may trigger notices or penalties.
Solution: Maintain consistent records and run monthly reconciliations between the two returns. - Delayed or Non-filing of Returns
Late filing results in penalties and interest, besides being a red flag for audits.
Solution: Implement monitoring systems or use expert services to ensure timely filings. - Incorrect Classification of Goods/Services
Wrong HSN or SAC code usage results in incorrect tax rates and potential compliance issues.
Solution: Keep updated with official tax codes and seek expert advice for proper classification. - Non-compliance with Reverse Charge Mechanism (RCM)
In cases where tax liability shifts to the recipient, failure to report and pay under RCM can cause disputes.
Solution: Precise record-keeping and timely reporting of RCM transactions are essential. - Inadequate or Inconsistent Financial Records
Audit examines books of accounts, invoices, and reconciliations. Poor record-keeping creates confusion and compliance problems.
Solution: Maintain meticulous documentation and reconcile accounts often. - Non-payment or Underpayment of Tax
Mismatch between paid tax and declared liability draws penalties.
Solution: Cross-check tax payments with declarations to ensure accuracy.
How Taxation Legal Advisor Helps
- Comprehensive review and reconciliation to prepare audit-ready records
- Expert responses and representation during audits and legal proceedings
- Proactive compliance advice preventing recurrent issues
- Efficient resolution of notices, demands, and appeals
Contact Information
For trusted assistance in managing GST audits and compliances, contact Taxation Legal Advisor at+91 90342 63307 or visit https://taxationlegaladvisor.in.
