GST audits are becoming increasingly common in India as authorities use advanced data analytics to spot discrepancies. Being unprepared can lead to heavy penalties and interest on 'leaked' tax.
Reconciliation is King
The most common audit issue is a mismatch between your purchase register and the GST portal (GSTR-2B). Regular, monthly reconciliation of Input Tax Credit (ITC) is the best defense.
Documentation Requirements
Auditors will look for valid tax invoices, proof of receipt of goods/services, and evidence of payment within 180 days. A robust digital document management system is your best friend during an audit.