HomeโบGSTโบGST Audit & Consultation
Comprehensive GST audit services โ GSTR-9/9C annual compliance, departmental audit representation, notice handling, ITC health checks, and strategic GST advisory for businesses across India.
GST compliance doesn't end with monthly return filing. Annual reconciliation, departmental audits, notice management, and proactive ITC health checks are all critical components of a complete GST compliance strategy. The GST department increasingly uses data analytics to identify discrepancies โ making proactive internal review more important than ever.
The GST department's ADVAIT (Advanced Analytics in Indirect Taxation) system cross-matches GSTR-1 vs GSTR-3B, GSTR-2B vs GSTR-3B ITC, GST turnover vs Income Tax turnover, and e-way bill data vs invoices โ automatically flagging discrepancies for scrutiny. ASMT-10 notices are being issued by the thousands. A proactive GST health check before year-end is the best insurance against unexpected demands.
Annual return consolidating all monthly GSTR-1 and GSTR-3B data for FY 2025-26. 6 parts, 19 sections covering annual outward/inward supplies, ITC availed and reversed, tax paid, late fees, and demands/refunds. Updated format per Notification 16/2025-CT includes new IMS-linked ITC disclosure tables and mandatory reporting for e-commerce operator supplies.
Self-certified reconciliation statement (no CA certification required since FY 2020-21) comparing turnover per audited financial statements vs GSTR-9 and ITC as per books vs ITC claimed in returns. Any unreconciled tax must be paid via DRC-03 before or along with GSTR-9C filing to avoid demand notices.
Initiated by the Commissioner or authorised officer. GST officers visit your business premises to examine books of accounts, records, invoices, returns, and other documents. Audit period up to 3 months (extendable to 6 months). Officer issues audit report in Form GST ADT-02. If tax short-paid or ITC wrongly claimed โ demand + interest + penalty.
Ordered when value of supply and tax has not been correctly declared OR when ITC availed is not within normal limits. Conducted by a nominated Chartered Accountant or CMA (not the taxpayer's own auditor). Report submitted within 90 days (extendable to 180 days). Taxpayer bears the cost of the special auditor.
A voluntary internal review of your GST compliance before the department does it. Identifies discrepancies between GSTR-1 and GSTR-3B, GSTR-2B and books, GST turnover and ITR turnover, ITC eligibility gaps, reverse charge non-payment, HSN code errors, and pending Rule 42/43 reversals. Errors found proactively can be corrected with minimal penalty exposure.
Pre-scrutiny of refund applications by GST officers before disbursement. For large refund amounts (typically above โน1 lakh), the officer may call for additional documents, visit premises, or verify invoice-wise details before approving the refund. Proper documentation and ITC reconciliation are critical to prevent refund rejection.
GSTR-9 and GSTR-9C are the most important year-end GST compliance requirements. Filing them correctly requires reconciling 12 months of returns with your audited accounts โ a process that typically reveals differences that must be explained or corrected.
| Aspect | GSTR-9 Annual Return | GSTR-9C Reconciliation Statement |
|---|---|---|
| Who must file | All regular taxpayers with turnover > โน2 crore | Regular taxpayers with turnover > โน5 crore |
| Exempt | Turnover โค โน2 Cr per CGST Notification 15/2025 | Turnover โค โน5 Cr, Casual taxable persons, ISD, TDS deductors |
| Due Date FY 2025-26 | 31st December 2026 | 31st December 2026 |
| Late Fee | โน200/day, max 0.25% of state turnover | โน200/day, max 0.25% of state turnover |
| CA Certification required? | No โ self-filed | No โ self-certified since FY 2020-21 |
| What it reconciles | Consolidates all GSTR-1 & GSTR-3B data for the FY | Books of accounts vs GST returns (turnover + ITC) |
| Key 2025 Updates | New tables for IMS-based ITC, ECO supplies โ Notification 16/2025-CT | New turnover reconciliation table for e-commerce |
| How differences are settled | Additional tax via DRC-03 before filing | Any remaining differences explained + DRC-03 payment |
The updated GSTR-9 format for FY 2025-26 includes new disclosure tables for: (1) ITC based on IMS (Invoice Management System) accepted invoices, (2) ITC reversals due to IMS rejections, (3) Supplies where ECO (e-commerce operator) pays tax under Section 9(5) โ must now be separately disclosed by both the ECO and the supplier. These new tables require careful reconciliation between IMS data and GSTR-3B ITC claims.
If your business uses goods or services for both taxable and exempt/personal purposes, you cannot claim full ITC. Rules 42 and 43 of the CGST Rules mandate partial reversal of ITC โ computed monthly and confirmed annually. Non-compliance is one of the most common audit findings.
Applies when inputs or input services are used for (a) both taxable and exempt supplies, OR (b) both business and personal purposes.
Formula: D1 = C2 ร (E รท F)
Where C2 = ITC on common inputs, E = exempt turnover, F = total turnover.
Must be computed monthly (provisionally) and finalised annually in GSTR-9. Any short reversal creates a liability with 18% interest.
Applies when capital goods (machinery, equipment) are used for both taxable and exempt purposes.
ITC to be reversed monthly = 1/60th of total ITC on the capital good ร (exempt turnover รท total turnover).
Computed separately from Rule 42. Capital goods exclusively used for exempt supplies โ full ITC reversal immediately. Common capital goods โ partial monthly reversal for 5 years.
Certain items are permanently blocked from ITC claims regardless of business use โ and are one of the most common audit findings when incorrectly claimed. Blocked credits include: Motor vehicles (unless used for transport/driving school/supply of vehicles), food & beverages (unless providing restaurant services), club memberships, rent-a-cab (unless statutory obligation), beauty treatments, health & fitness services, travel benefits to employees, works contract services for construction of immovable property, materials for construction, and ITC from goods/services for personal use. Claiming these in error attracts 100% penalty + interest.
Receiving a GST notice is not the end โ but ignoring it or responding incorrectly can escalate the matter significantly. Here are the most common GST notices and how we handle them.
Issued when the system detects a discrepancy between your GSTR-1 and GSTR-3B, or GSTR-3B ITC vs GSTR-2B, or GST turnover vs ITR turnover. Most common notice. Response required within 30 days. Incorrect or no response leads to demand in ASMT-12.
Issued when the department determines you have unpaid tax. Contains tax amount, interest, and penalty. Most serious notice โ demands payment or dispute within specified time. If not responded to, leads to recovery proceedings including bank attachment.
Issued when ITC claimed in GSTR-3B exceeds ITC available in GSTR-2B by a specified amount. Must respond with explanation or DRC-03 payment within 7 working days. Non-response leads to restriction on further ITC claims.
Issued before formal DRC-01 demand โ giving you an opportunity to pay the disputed amount voluntarily with reduced penalty. Responding with DRC-03 payment at this stage avoids higher penalties associated with formal demand notices.
15-day advance notice before GST officers visit your premises for a departmental audit. Specifies the period to be audited. You can request a date change with proper reasons. Documents must be ready for production.
System-generated notice for failing to file GSTR-3B on time. Must respond by filing the pending return. If not filed within 15 days, best judgement assessment proceedings can begin under Section 62.
Issued before suo moto cancellation โ giving 7 working days to respond. If you file pending returns and pay dues within this time, cancellation can be stopped. Failure to respond โ REG-19 cancellation order.
Issued when goods in transit are intercepted and detained โ typically for e-way bill mismatch, GST invoice discrepancy, or transportation irregularities. Requires immediate response to prevent goods confiscation.
ASMT-10: 30 days to respond. DRC-01C: 7 working days. GSTR-3A: 15 days. REG-17: 7 working days. Missing these deadlines results in ex-parte proceedings โ the officer decides without hearing your side, almost always resulting in maximum demand + 100% penalty. Our team responds to all notices within 48 hours of receiving them.
Beyond audit, Acculex provides expert GST advisory covering complex classification issues, input tax credit disputes, and business restructuring.
Correct HSN code classification to avoid wrong GST rate application. Wrong HSN = wrong tax rate = demand + 100% penalty. We review your product/service portfolio and assign correct codes.
Analysis of all input purchases โ eligible vs blocked (Section 17(5)). Identification of missed ITC and over-claimed ITC. Monthly ITC optimisation review.
Filing and tracking of GST refund applications โ export refunds with/without payment of IGST, inverted duty structure refunds, excess tax paid. End-to-end refund management.
GST implications of mergers, demergers, acquisitions, slump sales, and business transfers. Whether ITC transfers, registration changes, and transitional compliance are required.
IGST implications for import/export, place of supply rules for services, OIDAR compliance for digital services, and GST on import of services under reverse charge.
Drafting appeals before Appellate Authority (Form GST APL-01), GSTAT, and High Court. Pre-hearing preparation, legal argument development, and officer representation.
Businesses with aggregate annual turnover above โน5 crore (mandatory GSTR-9C)
Businesses that received a Departmental Audit notice (ADT-01)
Companies that want to proactively clean up ITC discrepancies
Exporters claiming refunds (pre-verification audit)
Businesses involved in a GST dispute or litigation
Companies undergoing M&A or major restructuring
Both GSTR-9 and GSTR-9C must be filed by 31st December 2026. Late filing attracts โน200/day late fee, capped at 0.25% of aggregate turnover in the state. Taxpayers with turnover โค โน2 Cr are exempt from GSTR-9 per CGST Notification 15/2025.
We review all your GSTR-1, GSTR-3B, and GSTR-9 returns for the relevant period. Cross-check GSTR-1 vs GSTR-3B for liability mismatch, GSTR-2B vs GSTR-3B for ITC mismatch, and GST turnover vs ITR turnover. This preliminary review identifies the risk areas and scope of work.
Every invoice in your purchase register is matched against GSTR-2B for GSTIN validity, ITC availability confirmation, HSN code match, tax amount match, and supplier filing status. Missing ITC is recovered by following up with suppliers. Excess ITC is flagged for reversal before it triggers a notice.
Cross-check of turnover per books vs GST returns, HSN-wise rate correctness, reverse charge obligations discharged, e-commerce operator TCS deducted, zero-rated exports properly declared. Any unreported supplies or rate differences identified and corrected proactively.
All identified discrepancies are discussed with management. Where under-reported or excess ITC is confirmed โ voluntary payment via Form DRC-03 before GSTR-9C filing. This reduces penalty exposure from 100% to 25% of tax dues. Amended returns filed where permissible.
GSTR-9 prepared with all 19 sections completed accurately. GSTR-9C reconciliation statement prepared โ turnover differences and ITC differences explained with notes. Signed and filed on GST portal by 31 December 2026. Any residual differences reported in GSTR-9C with explanations.
If the officer raises queries after GSTR-9C filing, we prepare and submit detailed responses. For departmental audit (Section 65) notices, we prepare complete documentation, represent you during the audit, and draft responses to the ADT-02 audit report if demands are raised.
From GSTR-9/9C filing to departmental audit representation and notice handling. Our CA team is your year-round GST compliance partner.