Ideally the ledger accounts for outward tax liability in the books of accounts should be maintained GST rate wise. It minimizes the chances of errors in classification due to over-sight in the books of accounts and ensures that the data generated from books of accounts is correct and consistent. The rate of tax should also be mapped with HSN to ensure that errors of HSN classification is also minimized.
Generally, in various accounting softwares and ERPs, facility to generate report of GST rate wise outward tax liability along with taxable value or transaction value is available. The same can be relied upon as document. The total of said report should be matched with the total turnover declared in the books of accounts. Further, the amount of tax should also be matched with total credits in the GST Liability Register in the books of accounts.
In cases, where no report of rate wise GST liability along with taxable value can be generated or where the liability ledger is not maintained rate wise, the GST auditor should use substantive audit tools to check if the details of various invoices issued by the registered person have been consistently and accurately booked in the books of accounts. After applying substantive test, the auditor may become satisfied that proper recording of transactions has taken place and reports duly prepared by the registered person for rate wise amount of tax liability and taxable amount is made available to him. In such a case, the auditor can rely on the same with a separate disclosure that rate wise tax liability has not been maintained in the books ofaccounts.
In cases where no rate wise tax liability and taxable value is maintained in the books of accounts and registered person is engaged in making outward supplies of goods or services or both of different rates, then the auditor may consider making a disclosure. Due to the lack of availability of rate wise tax liability from the books of accounts, the auditor should state that he is not in a position to punch the details in the given table.