Under the Central Excise and Service Tax laws, there is no requirement for audit of accounts and furnishing reconciliation statement by an accountant except special audit. However, several State VAT laws stipulate audit of records by a Chartered Accountant and filing of VAT audit reports. Threshold limits are prescribed for such audits.
Reconciliations between the tax records and audited statements of accounts are generally sought for at the time of assessment, audit or investigation by the Revenue authorities. There is no statutory requirement to furnish such reconciliation statements under the present laws.
In India, the tax compliances by most tax payers leave a lot to be desired. Therefore, while the information provided by the tax payer would be accepted at its face value, there have to be certain checks and balances put in place to ensure that no tax leakages take place due to inadequate information of tax laws, negligence in maintaining records, human or technical errors and fraud.
Under the GST law audit provision has been defined under Section 63 to 65.
AUDIT BY DEPARTMENT
Commencement date of audit for the above sub section shall be , the date of record and other document called and submitted by RTP or Start of audit at RTP office which ever is later.
POWER OF CAG FOR AUDIT
The proper officer shall, upon request made in this behalf, make available to the comptroller of Auditor General of India any information , record and return under the act for conduct of audit as required.
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About the Author: Author is practicing chartered accountant in Gurgaon and having specialization in Service Tax and Haryana VAT. He can be reached at email@example.com.