Unified GST audits for easier card compliance checking


New Delhi: Central and state governments are working to unify goods and services tax (GST) controls across the country, making GST compliance checks more predictable for businesses, said a person aware of the talks at the center on this issue.

The new audit framework will for the first time prescribe common principles to be followed by both central and state officials conducting GST audits, bringing uniformity to the exercise, said the person, who spoke on condition of anonymity.

“This will be implemented later this year once the new GST audit manual is approved by the GST Board,” the person said. It will establish the principles to be followed by officials and will guide them how far and deep to go. verifying the transactions These are in the nature of guidelines that will also specify the responsibilities and powers of the accountant.

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GST audits or departmental audits are conducted to verify the accuracy of declared sales, taxes paid, refunds claimed and input tax credit by reviewing tax returns and other records maintained by the company. Any discrepancy in information in different documents can raise a red flag.

Departmental GST audits have gained momentum in recent months after companies were given time to adjust to the new indirect tax regime rolled out in 2017.

A unified approach to audits across the country is an important step in ensuring tax certainty, experts say.

“A common GST audit manual for the Center and the states will be helpful to businesses as it ensures consistency in how audits are conducted across the country. Companies were assigned separate GST records for their operations in different states, which may be under the jurisdiction of the central or respective state.

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A unified audit approach gives companies certainty about preparing for audits and meeting documentation requirements. Without it, handling audits across states could become complicated,” explains Abhishek Jain, Partner Indirect Tax at KPMG in India.

A common audit approach allows companies audited in one state to understand what to expect in other jurisdictions.

Questions emailed to the Treasury Department, the CBIC and the GST Board Secretariat on Friday seeking comment on the story went unanswered at the time of publication.

An audit means that you visit a business premises after timely notification and inspect various documents, including audited annual accounts, stock registers, income tax returns, production data and data of customers and suppliers.

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If an underpayment of tax is detected, a message can be issued within a certain time.

The Central Board of Indirect Taxes and Customs (CBIC) has already informed its field officials that, given that many companies have only recently come under central jurisdiction under GST, audits should cause minimal inconvenience and certainly no disruption to business operations, said a document on GST controls published in November by the Treasury Department’s Directorate General for Taxation.

In the case of small taxpayers, agents have been advised not to visit the property and to manage with the documents submitted.

Even where the department has access to documents from its own systems, those documents will not be requested from the taxpayer.

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