Advocate R.P. Singh
Like existing provision of law every taxable person shall self-assess the tax in the Goods and Service Tax regime also. The tax departments don’t have direct control over supply of goods or services. The departments through audit conduct verification of accounts, returns and other records related to production, clearance or provision of service.
Section 2 (13) of the Central Goods and Service Tax Bill, 2017 defines ‘Audit’, the definition says that “Audit” means examination of records, returns and other documents maintained or furnished by the taxable person under this Act.
The following modes of audit are prescribed in the Central Goods and Service Tax Bill, 2017.
a) Audit by tax authorities (CGST & SGST).
b) Special Audit by nominated person.
1. AUDIT BY TAX AUTHORITIES:
Section 65 of the Central Goods and Service Tax Bill, 2017 provides mechanism of audit by tax authorities (CGST & SGST). The relevant point of Section 65 is as under:
A) It says that Commissioner of CGST/SGST or any officer authorized by him may conduct the audit.
B) The authorities may conduct the audit at the place of business or office of the taxable person.
C) The taxable person shall be informed in advance not less than 15 working days to the audit.
D) It prescribed three month time to complete the audit. However the time may be extended by Commissioner for further period but not exceeding six months.
E) It says about power of officer who conducts the audit.
F) And if there is any discovery of tax, not paid or short paid or erroneously refunded, or Credit wrongly availed or utilized, the department may initiate action under Section 73 of Section 74 of the Act.
2. SPECIAL AUDIT:
Section 66 of the Central Goods and Service Tax Bill, 2017 came with provisions of special audit. The relevant point of Section 66 is as under:
A) The section says that if department is of the opinion that the value has been declared wrongly or credit is not within normal limits. The records with prior approval of Commissioner examined and audited by a Charter Accountant or a Cost Accountant.
B) The Section prescribed ninety days’ time to submit report by nominated person/auditor. However the period can be extended further 90 days on the request of taxable person or nominated person.
C) The special audit can be conducted even if records are already audited under any provision of law.
D) It provides opportunity to being heard to taxable person.
E) The remuneration of auditor/charter accountant or cost accountant shall be determined and paid by the commissioner.
F) And if tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the proper office initiate the action under section 73 or section 74.
The Central Goods and Service Tax Bill, 2017 provides mechanism of self-assessment for payment of tax. The audit of taxable person can be done by two different modes in the Goods and Service Tax regime. The both above said section make clear that the Central Goods and Service Tax Bill, 2017 prescribed complete mechanism for the both audits to the records of taxable person. However the detail procedure and their compliance are yet to be come through rules, notification and circulars which make clear the complete cloud in this regard.