Ch.1 — Introduction
Meaning of finalisation of accounts & financial statements (incl. notes); the audit mandate (GST audit
u/s 35(5) omitted w.e.f. 01-08-2021, replaced by self-certified GSTR-9C u/s 44 for turnover > ₹5 cr);
and an illustrative list of ~22 reconciliations between books and GST returns (credit/cash ledgers,
turnover, ITC claimed/reversed/ineligible, GSTR-1 vs 3B vs 2A/2B vs e-way bills, RCM/TDS/TCS, demands vs
contingent liabilities, CN/DN, cross-charge).
Ch.2 — Audit Approach to GST Compliances
The taxpayer's self-assessment responsibilities on outward supply (scope, time/value/place of supply,
classification, rate, TDS/TCS) and inward supply (ITC eligibility, RCM, 180-day reversal); set-off and
payment rules (RCM in cash only); and the purpose of GSTR-9C — to reconcile returns with the audited
financials and provide for any additional liability with interest.
Ch.3 — Review of the Balance Sheet
Line-item review of assets & liabilities: PPE & blocked/ineligible credits u/s 17(5)
(motor vehicles ≤13 seats, vessels/aircraft, construction of immovable property), assets with job
workers, RCM on capitalised imported services, ITC reversal on disposal of capital goods (Sec 18(6)),
Ind AS right-of-use assets; inventories (goods-in-transit cut-off, job-work time limits & ITC-04,
sale-on-approval, write-off ITC reversal); trade receivables & exports (LUT, forex realisation,
Rules 96A/96B); ITC ledger vs portal vs GSTR-2B reconciliation; GST cash-ledger reconciliation;
set-off & gross/net disclosure of GST asset/liability; and trade payables (180-day ITC reversal,
foreign-creditor RCM, e-commerce TCS).
Ch.4 — Statement of Profit & Loss
Revenue: turnover reconciliation across multiple GSTINs, supplies between distinct persons /
stock transfers, deemed supplies without consideration, HSN classification & correct rate, treatment
of discounts (Sec 15(3)), GST on advances (services vs goods, security deposits, retention money),
exchange-rate differences, non-GST / Schedule III supplies, sales-promotion schemes (free samples vs
BOGO), reimbursements (pure agent), and AS / Ind AS revenue-recognition differences.
Expenses: blocked credits (food, insurance, club, personal use, vehicle upkeep), expenses liable
to RCM u/s 9(3)/9(4) (GTA, legal, director, security, rent), import of services, employee recoveries /
perquisites / gifts > ₹50,000, and the now-mandatory Input Service Distributor (ISD) regime
(from FY 2025-26) for multi-GSTIN entities.
Ch.5 — CARO 2020 & Tax Audit
GST impact on auditor reporting: inventory clause 3(ii) (ITC reversal on damaged/lost stock), and
undisputed & disputed statutory dues under clauses 3(vii)(a) and (b) — amounts outstanding > 6
months and the forum where disputes are pending.
Ch.6 — FAQs
22 practical Q&As: treating post-finalisation GST adjustments as next-year / prior-period items,
interest & penalty under Rates & Taxes, GST-TDS accounted only on GSTR-7 filing, export-without-LUT
provisioning, GST excluded from closing-stock valuation, ITC on RCM, the 180-day reversal even when the
agreed credit period is longer, and more.