GST Audit – Applicability, Process, and Due Dates (2025 Guide)

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GST Audit – Applicability, Process, and Due Dates (2025 Guide)

GST Audit is an important compliance requirement for businesses registered under the Goods and Services Tax (GST) regime in India. The objective of a GST audit is to ensure that the taxpayer has correctly calculated and paid GST, claimed Input Tax Credit (ITC), and filed accurate GST returns. If you are running a business, it is crucial to know whether a GST audit applies to you, what the process involves, and what due dates you need to remember.

In this blog, we will explain the applicability, process, and due dates of GST audit in a simple and SEO-friendly manner.

What is a GST Audit?

A GST audit is an examination of the books of accounts, returns, and other documents maintained by a registered person under GST. Its primary purpose is to verify:

  • The correctness of turnover declared

  • Taxes paid

  • Refunds claimed

  • Input Tax Credit (ITC) availed

  • Compliance with GST law

Simply put, a GST audit ensures that there are no discrepancies between your financial records and GST returns.

Applicability of GST Audit

As per Section 35(5) of the CGST Act (before it was amended), businesses with aggregate turnover exceeding ₹2 crore in a financial year were required to get their accounts audited by a Chartered Accountant or Cost Accountant.

However, after the Finance Act 2021, mandatory GST audit and certification by a CA/CMA was removed, and instead, businesses are required to self-certify the GST Annual Return (GSTR-9) and reconcile it with their financial statements.

Who Needs to Do a GST Audit Now?

Even though CA certification is no longer mandatory, the following taxpayers must still prepare and reconcile their GST data:

  • Businesses with aggregate turnover above ₹5 crore must file GSTR-9C (Reconciliation Statement).

  • Businesses with aggregate turnover above ₹2 crore must file GSTR-9 (Annual Return).

  • Businesses below ₹2 crore can file GSTR-9 voluntarily.

So, while the legal requirement for a formal “audit” is gone, self-audit and reconciliation remain crucial to avoid GST notices and penalties.

Process of GST Audit (Step-by-Step)

Here’s a step-by-step process to perform a GST audit or reconciliation for your business:

✅ Step 1: Gather Data

Collect all relevant data for the financial year:

  • Sales register, purchase register

  • GSTR-1, GSTR-3B, and GSTR-2B data

  • E-way bill data

  • ITC claims, debit/credit notes

✅ Step 2: Reconcile GST Returns with Books

Match your turnover in books with GSTR-1 and GSTR-3B, and reconcile ITC as per books with GSTR-2B.

✅ Step 3: Identify Mismatches

Look for common mismatches such as:

  • Missing invoices

  • Excess ITC claimed

  • Tax paid under wrong head (CGST/SGST/IGST)

  • Unreported outward supplies

✅ Step 4: Make Adjustments

Pass necessary accounting entries and pay additional tax liability (if any) using Form DRC-03 before filing the annual return.

✅ Step 5: Prepare GSTR-9 & GSTR-9C

Prepare and file GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) on the GST portal.

✅ Step 6: Keep Proper Documentation

Maintain proper documentation for at least 6 years from the due date of annual return filing. This helps in case of future GST departmental audits or investigations.

Due Dates for GST Audit Filing (2025)

The due date to file GSTR-9 and GSTR-9C is 31st December following the end of the financial year.

Financial Year Form GSTR-9 (Annual Return) Form GSTR-9C (Reconciliation Statement)
FY 2024-25 31st December 2025 31st December 2025

⚠️ Important: The government may extend the due dates through official notifications. Always check the latest updates from CBIC before filing.

Penalties for Non-Compliance

Failing to file GSTR-9 or GSTR-9C on time can attract penalties and late fees:

  • Late Fees: ₹200 per day (₹100 CGST + ₹100 SGST), subject to a maximum of 0.5% of turnover in the state.

  • Interest: 18% per annum on unpaid tax liability.

  • Notices: The GST department may issue notices if mismatches are found.

Best Practices for a Smooth GST Audit

  • Use Accounting Software: Automate reconciliation to avoid manual errors.

  • Do Regular Reconciliations: Don’t wait till the year-end; reconcile monthly or quarterly.

  • Maintain Proper Records: Keep invoices, challans, and ITC documents ready for audit.

  • Consult a Tax Professional: Even though CA certification is not mandatory, expert review reduces the risk of errors.

Conclusion

A GST audit or reconciliation is no longer just a compliance formality – it’s a crucial step to ensure your business avoids penalties and notices. By reconciling your GST data with your books, filing GSTR-9 and GSTR-9C on time, and maintaining proper documentation, you can stay GST-compliant and stress-free.

Remember: The deadline for filing annual returns is 31st December 2025 for FY 2024-25. Start preparing early to avoid last-minute hassles.

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