ANNEXURE – GSTAM- VI

QUESTIONNARE FOR REVIEW OF INTERNAL CONTROL

SYSTEM AND WALK THROUGH.

PURCHASES – INWARD SUPPLIES

1. Whether all purchases are centralised or de-centralised. If all purchases are
authorised by few key persons like owner or Managing Director etc, it may
require in-depth study of purchases.
2. Whether all the purchases are made only by issue of purchase order and whether
different series of purchase order are issued. Also, the issuance of series of
purchase order is centralised in the purchase section. Are there any cases where
purchases have been made without issue of purchase order?
3. Whether there is a system of authorised Vendor List. If not, what is the system
of approving particular vendor? Are there instances where substantial purchases
have been made through unauthorised vendors?
4. Whether rejected inward supplies are stored separately. What is the system of
accounting for the rejected inward supplies/short quantity?
5. Whether for purchase returns, debit notes are issued?
6. Whether for rejected inward supplies any set procedure is followed.
7. At what stage ITC is availed, i.e. either before testing for rejection or after testing
for rejection?
8. On the inward supplies rejected or short quantity received, whether the ITC
reversal is done on each invoice basis or on monthly basis.
9. Whether any item supplied free of cost by the customer.

OUTWARD SUPPLIES

1. What is marketing pattern - is it through depot, stockist, C&F agent related

person or directly by the registered person?
2. How many series of outward supply /GST invoices are generated? For example,
there can be different series for outward supplies, export supplies, scrap, other
items and job work.

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 3. Whether all different series of invoices of out ward supplies are entered in one
outward supply account or in different outward supply account.
4. Who authorises for despatch of outward supplies?
5. Whether any charges for erection/commissioning collected?
6. Whether Tax invoices are issued for composite supply of both goods and erection
& Commissioning (which involves applicability of rate of tax of principal supply,
viz., goods)?
7. Whether any materials supplied to the recipients at free of cost?
8. Any amount for marketing expenses, Advertisement, Royalty, Handling Charges,
Packing Charges, Warranty, after sales service and Insurance received from
recipient in any manner?
9. Whether commercial invoices and outward supply invoices (Tax Invoices under
GST) are same or different?
10. Who is authorised to fix the price of outward supplies and whether any printed
price circulars are issued?
11. Who is authorised to make supplementary outward supply invoices or debit note
for price variation/additional recoveries (advertisement, after sales service,
additional packing, insurance, freight, depot charges)?
12. Whether outward supply figures mentioned in GSTR1 are tallying with the records
maintained by the registered person?
13. Whether any goods were received for repair etc. on return by the recipients?
14. Types of discounts given and how are they accounted for in relevant records.
15. Whether recipients’ accounts are debited with the net amount of invoice or gross
amount?
STORES
1. Whether receipt in the stores record are shown only after inspection of inward
supplies or before inspection.
2. What is the frequency of stock taking of all the items? How difference is
accounted for and what reports are prepared.
3. What is the frequency of physical inventory for high value items (A category in
ABC analysis) whether a report is prepared for stock verification and put-up to
management and what is the frequency of reporting?
4. For inward supplies covered by insurance claim what is the procedure for filing
the claim. Whether such inward supplies are entered in the store register or these
are shown in separate account. Whether any register or report is prepared for all
such claims.

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5. What are the records maintained for inward supplies sent out for Job Work?
Whether scrap is received back or job work price is adjusted.
6. How the defective/ damaged inward supplies are reflected in the books of accounts?

TAX ACCOUNTING
1. Whether GST paid on inward supplies are shown separately in purchase account?
2. Whether all inward supply invoices are entered for full value and thereafter for
rejected/stock quantity, credit note or sales return invoice is prepared.
3. Whether GST payable on outward supplies made and shown separately in
outward supply account?
4. In case of capital goods whether full value including GST is debited in the books
or net value is shown in the capital goods account.
5. In case of capital goods fully written off whether GST deducted from such
expenditure account or not?
6. What is the system to check GST liability (payment through Electronic Cash
ledger / Electronic Credit Ledger) as shown in the financial records with the GST
records? Whether any reconciliation is made for the differences?

JOB WORK
1. Whether any input/output ratio has been determined for sending the input for job
work.
2. What are the records maintained for sending inputs for job work (either directly
from the supplier of inputs/ from the place of business of the registered person)
and whether the records show quantity of inputs sent, quantity of final product to
be received, actually received and variation?
3. Whether any monthly or periodic statements are prepared for each job work and
at what level the statements are verified for taking corrective action?
4. What is the system of treatment of scrap generated at job worker? Whether it is
brought back to the registered person’s premises or allowed to be disposed off by
job worker?
5. Whether the finished goods after job-work are being supplied from job-worker’s
premises.
6. When the finished goods are not received back from the job worker in time (180
days), what action is taken by the company and what accounting treatment is
done for the same?

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7. Whether the processed inward supplies after conversion into outward supplies are
sold by the principal directly from the premises of Job-worker?
8. Whether outward supplies are made after transferring the same to any other
place from the job-worker’s premises?

Part B- SUPPLY OF SERVICES

QUESTIONAIRE FOR REVIEW OF INTERNAL CONTROLS

B. Questionnaire for gathering information:

1. General:
1. Name & address of the registered person.

2. Name and contact number of the ‘Authorised person’ for Audit.

3. GSTIN

4 Whether the taxable person is also registered as an Input Service

Distributor?

Whether the taxable person is a Proprietary, Partnership firm,

5 Limited liability Partnership firm (LLP), Pvt. Ltd Company, Public
Limited Company?

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6 Details of transactions with Associated Enterprise.

7 Details of Taxable Supplies made

8. Details of Taxable inward supplies received for which tax has to be

paid under reverse charge. (under Section 9(3)/ 9(4))

9. Details of exempted Services supplied, if any, & Notification No.

10. If both Taxable and Exempted Services are provided, whether ITC is
being reversed as per the prescribed method

11 Details of Exports

Whether any periodical report/statement is furnished to any State

12 / Central Government / Authority / Regulatory bodies? If yes,
details thereof.

13 Whether any offence case is booked in respect of GST, Income Tax,

VAT/ Sales Tax. If so, details thereof.

14 Whether any service is sub-contracted partially or wholly? If so,

details thereof.

15 Whether ITC on input services availed? If so, indicate details of major

input services.

16 Whether ITC on Capital Goods availed? If so, details of such Capital

goods, along with their HSN

Whether entire consideration payable to the supplier was paid to

17 them within 180 days on inputs received? If not, whether reversal
of ITC/ interest thereof was done?

In case the registered person is an Input service distributor (ISD),

18 whether he is having any unit supplying only exempted outward

supplies? If yes, whether he is distributing the credit in respect of
services related to that unit also?

Whether any amount payable/ paid to the supplier has been

19. adjusted against the receipt/ receivable and net income shown in
the P&L Account.

20 Whether any advance payment is received towards outward supplies?

If yes, whether GST is paid on such receipts?

Is there any expenditure to any entity abroad which has been made
21. but on which taxable person is not required to pay GST under
reverse charge mechanism? If yes, details thereof.

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 22 Whether GST is paid on the gross value received including TDS
amount deducted by the service recipients?

Whether PF/ ESI or any other charges of the personnel of the

23 service provider are being directly paid by the service recipients?
If so whether GST is paid on such amount.

24 Details of agreements entered into by the registered person for

supplying / receiving services

25. Details of expenditure in foreign currency on which GST has

neither been charged by the registered person nor it is payable
under reverse charge mechanism

2. Invoicing pattern
01. Is invoice issued in respect of all transactions? If not, reasons for
not issuing invoice.

02. How many series of invoices are being used?

03. If more than one series is used, give details of each such series.

04. If there are more than one series of invoices, is GST paid on all the
series of invoices?

05. If not, then the reasons for not paying GST on such series of invoices
(e.g. exempted / exports / non-taxable services). Give details.

06. Whether the invoice contains the GSTIN?

07. Is invoice issued on the date of supply of service or before or later?

08. List the different heads under which amounts are billed in invoices
and their corresponding heads in the Trial Balance.

09. Name the heads in the invoice on which GST is not paid.

10 Are there any reimbursements billed in the invoice?

11.1 Are there any debit/ credit notes issued for claiming
reimbursements?

12. If yes, is GST paid on these reimbursements? If not, reasons thereof.

13 Whether invoices are generated on Computer. If yes, then whether

the Invoice Numbers are generated automatically or is fed manually.
What safe guards are provided in the system for data security? Give
the name and designation of the person having the authority to
cancel an invoice.

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 14. Whether any amount is recovered by issue of debit note and
whether it is included in the gross value of services?

15 Give a brief on sale pattern of services liable to GST.

16 Are any goods or services supplied by the service receiver free of

cost or at subsidized price?

3. Accounts and records

01. Whether accounts are prepared on mercantile basis or cash basis?

02. Whether the Accounts are maintained electronically? If yes, the name
of accounting packages / computer software installed for maintaining
accounts in the units like Tally, FAS etc:

03. Whether accounting software was switched over to some other

software during the audit coverage period.

04. Whether any changes have been made in the accounting policies
affecting GST liability relating to reimbursement of expenses, timing
of payment of GST and treatment of payments in foreign currency?

05. Whether accounts are audited by Statutory Auditor? If so, name and
address of the auditor.

06. Whether Cost Accounting records as prescribed under Section 148 of

the Companies Act, 2013 are required to be maintained?

07. Whether Cost Audit is conducted and if yes report thereof is

prepared?

08 Whether there is any system of Internal Auditing?

4. Making of GST return

1 List the ledger/ accounts from where the monthly gross amount
received is taken for taxable service.

2 List the ledger/accounts from where the amount received towards

gross monthly amount of Exports is taken.

3 List the ledger/accounts from where the amount received towards

gross monthly amount of exempted service is taken.

4 List the ledger/accounts from where the gross monthly amount of

amount received as pure agent is taken.

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5 List the ledger/ accounts from where the gross monthly
amount billed is taken.

5. Place of supply

1 Whether place of supply is correctly determined in case of supplies so

as to identify supplies as whether inter-state or intra state supplies

2 ZERO RATED SUPPLIES - Value of services exported if any, on which

no GST has been paid?

3 If so whether all such supplies are eligible to be treated as such ZERO

RATED SUPPLIES

4 Is the payment for services exported received by the service provider

in convertible foreign currency? It not, list those transactions where
amounts are not received in foreign currency.

5 Is the payment for services exported received by the service provider

in convertible foreign currency within the time limit prescribed by
RBI? If not, give details.

6 Whether any services has been exported to “Associated

Enterprises”. If yes, mention the value thereof.

6. VALUATION OF SERVICES

1 Is there any outward supply of goods involved in the course of

providing service or otherwise?

2 Is the value of goods supplied as mentioned in Point (1) above

included in the gross amount charged as declared in GST
3 “Gross Amount Charged” includes reimbursements billed for the
purpose of determining value of supplies and in turn the tax liability?

4 Is there any, Value of reimbursements on which GST is not charged

7. AMOUNTS TO BE INCLUDED IN TAXABLE VALUE

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1 Whether any Goods / Services provided free of cost by the recipient

2 Whether reimbursements received from recipient

3 Whether any other expenditure borne by the recipient, which are +

otherwise to be borne by the supplier?

8. MIS

1 What is the organization structure?

02 Who is responsible for billing and outward supplies?

3 What reports are given to his seniors on the daily, weekly, monthly
sales? Give sample copies?