New Delhi: The Center and state governments are working on making Goods and Services Tax (GST) audit uniform across the country, which will make GST compliance checks for businesses more predictable, a person said during Centre-state discussions on the matter. told about.
The new audit framework will for the first time lay down common principles to be followed by both central and state authorities conducting GST audits, which will bring uniformity in practice, said the person who spoke on condition of anonymity.
“It will be implemented after the new GST audit manual is approved by the GST Council later this year,” the person said. Transaction confirmation. These are in the nature of guidelines which would also specify the responsibilities and authority of the auditor.
GST audit or departmental audit is carried out to verify the veracity of declared sales, taxes paid, refunds claimed and input tax credit availed by going through tax returns and other records maintained by the business. Any mismatch in information on various documents can raise a red flag.
Departmental GST audits have picked up pace in recent months after businesses were given time to adapt to the new indirect tax regime introduced in 2017.
Experts said that a uniform approach in audit across the country is a major step in ensuring tax certainty.
“A common GST audit manual for the Center and states would be helpful for businesses as it would ensure consistency in the way audits are conducted across the country. Businesses were allotted separate GST registrations for their operations in different states that may be under the jurisdiction of the Center or the respective state.
A uniform audit approach will give businesses the certainty they need to prepare for audits and meet documentation requirements. In the absence of this, handling audits across states can become complicated,” explained Abhishek Jain, partner, indirect tax, KPMG in India.
A common audit approach will enable businesses audited in one state to understand what to expect in other jurisdictions.
Queries seeking comment for the story emailed to the Finance Ministry, CBIC and the GST Council Secretariat on Friday remained unanswered at the time of publication.
An audit involves visiting business premises after giving sufficient notice and inspecting various documents including audited financial statements, stock registers, income tax returns, production details and data of customers and suppliers.
If any short payment of tax is detected, a notice may be issued within a specified time.
The Central Board of Indirect Taxes and Customs (CBIC) has already advised its field officers that considering that many businesses have recently come under the central jurisdiction under GST, the audit should cause minimum inconvenience and There should certainly be no disruption in business operations, according to a document on GST audit published in November by the Directorate General of Taxpayer Services under the finance ministry.
In case of small taxpayers, the officials have been advised not to visit the premises and manage the documents submitted.
Also, wherever the department has access to documents from its system, those documents will not be sought from the taxpayer.
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