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A recent change in GST in the Finance Bill 2021 is the removal of the requirement of the GST Audit annually and the inclusion of self-certification. It was proposed due to a variety of reasons such as small taxpayers suffer from the CA’s high cost of compliance fees, who audit GST accounts annually.

Advantages of this decision

Experts anticipate that the government’s decision to remove CA’s mandatory annual audit requirement can aid many firms to save audit fees.

A government official quoted- “The basic purpose of this move is to expand the GST base by reducing compliance burden and save businesses, particularly small firms, from paying auditing fees to professionals,”  Read more

Some other advantages that the taxpayers are expecting are –

  1. This move will reduce the compliance burden on the medium and large enterprises that have to comply with the rules at multiple levels.
  2. This rule will relieve the businesses suffering from audit backlogs.
  3. It will also reduce the pressure on the internal and external teams.

But is it really a relief?

The tax community has mixed feelings about this move. One of the biggest reasons for doubting such a decision is the businesses have to deal with a massive amount of data that needs to be massaged well to prepare it for further procedures.

In addition, they feel that self-certification will undoubtedly put pressure on the taxpayers as they have to rely on their internal teams, overloading them with more responsibilities. Such pressure will introduce manual errors, ineligible and inaccurate credits and more such issues.

Some significant objections that are raised:

  • The self-certification process will introduce errors and, therefore, penalties and interests, raising the costs.
  • The problem of inaccuracies will give rise to mismatches increasing the cost.

What are the options that the companies have to tackle such a scenario?

It is important for the taxpayers to get more clarity from the concerned tax authority. The experts can guide businesses and help them to take the right approach moving forward.

Also, some taxpayers think that streamlining the tax workflow with technology can help in such a situation. Incorporating practices and systems powered by automation can surely help the taxpayers.

For instance, Cygnet Infotech’s Audit tool helps businesses of all sizes to ensure that they have appropriately complied with the law before self-certifying the GST audit report.

It helps cover the entire data and provide the required validation to endorse the audit results and give the required conviction to certify the report.  Audit Tool offers a 6-way reconciliation with sales register/purchase register/general ledger/GSTR 2A or 2B data. It ensures that 100% of the transactions are reconciled before certifying the audit report.

Main features of the audit tool

  • Covers 100% of your sales and purchase data instead of the usual 10% sampling data
  • Reconcile data from multiple sources- sales GL, purchase GL, liability GL, ITC GL, and stock register GL
  • Flags mismatches discovered during the reconciliation between GL and register and GL and GSTN
  • Helps the internal audit team prepare for an external audit by planning explanations for the audit findings
  • Saves time and brings in more transparency to your data


While scrapping the GST Audit by professionals and moving to self-certification has shifted the burden from auditors to taxpayers, professional guidance and investment in technology is the best way to tackle this situation. It will help the firms identify the gaps early, saving them from risks and penalties later by the tax authorities.

Komal Vithalani

Komal Vithalani

Content Writer

Komal Vithalani, a Chartered Accountant and Commerce graduate, is a dedicated professional committed to delivering value with years of expertise in navigating the complexities of indirect tax laws. Her practical excellence includes managing perplexed litigations, dispensing tactical tax advice, conducting thorough compliance checks, supervising audits, and crafting articulate and insightful content. At Cygnet, Komal seamlessly blends her profound understanding of tax regulations with cutting-edge tax technology. Leveraging her competence, she adeptly transforms complex tax tech jargon into concise, impactful, and engaging content. This not only aids readers in comprehending tax-related topics with enlightening clarity but also ensures the delivery of narratives that resonate broadly.

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