New Delhi: India Inc is set to face first ever tax audit under the goods and services tax (GST) regime. The GST authorities have begun issuing notices for the tax audit exercise, which involves detailed scrutiny of the accounts and records for FY18.
Tax authorities have issued notices seeking audit of accounts and records from July 2017 till March 2018, the first year of GST implementation. India had rolled out GST, subsuming multiple state and central taxes, from July 1, 2017.
ax authorities had issued a detailed GST manual earlier in June, making it clear that at least 70% of taxpayers in each commissionerate have to be audited.
However, extensions given for filing of returns for 2017-18 in 2019 several times over delayed the exercise.
The initial deadline was December 31, 2018.
“The audit notices issued indicate that the GST authorities have commenced their review of the information submitted by businesses,” said MS Mani, Partner, Deloitte India.
It is essential that businesses provide the information sought and clarify on doubts raised, Mani said.
However, some tax experts say the move may lead to unnecessary harassment of taxpayers.
“There has been no policy statement as to how and when these audits would be conducted and given that most big unit have multi state registrations, it will be a herculean task to get the audit done in all the states for each year,” said Bipin Sapra, partner at EY.
He added that the GST audits were being ordered even where GSTR 9C has been submitted and the GST authorities have reconciliations of the financial data and tax paid.
“There needs to be a centralised audit of these records to avoid undue hardship and promote ease of doing business in India,” he said further.
Source : Economic times