Books Turnover vs GST Turnover Mismatch During Tax Audit
Quick answer: A mismatch between turnover in your books and turnover in your GST returns is common, and many differences have valid reasons such as timing, advances or exempt supplies. During a tax audit, the CA will ask you to reconcile the two, and unexplained differences can lead to GST notices, income tax queries and tax, interest and penalty. At Sharda Associates , our Chartered Accountants (CA) reconcile books with GSTR-1, GSTR-3B and GSTR-9, conduct tax audits, file income tax returns and reply to GST and income tax notices, and also prepare CA-certified project reports for bank loans and business funding. A reconciled turnover is the best protection during audit and assessment. Why Does Turnover in Books Differ from GST Turnover? Books follow accounting rules, while GST returns follow the time and value of supply rules in the GST law. This creates differences even when both are correct. During tax audit, the CA compares sales in the profit and loss account with GST turnover...
