SPECIAL AUDIT UNDER GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 7-1-2018<\/p>\n
Special audit is a tool provided to the revenue to order for special audit under section 66 of the GST Act, 2017 to be carried out by a chartered accountant or a cost accountant. Such special audit shall be carried out on the directions of deputy or assistant commissioner with prior approval of the commissioner, if such officer is of the opinion that the assessee has not declared the value correctly or credit availed is not within the normal limits. Finance Act, 1994 contained section 72A for special audit of assessee by chartered accountants or cost accountants. In Central Excise Act, 1944, section 14AA provided for special audit.
\nIn SKP Securities Ltd. v Deputy Director (RA-IDT) 2013 (1) TMI 549 – CALCUTTA HIGH COURT , it was held that condition precedent to order for special audit is reason to believe that person liable to Service Tax is within circumstances stipulated in<\/p>\n
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\n(b) Interest of revenue
\nThese principles should guide his opinion that :
\n(a) Value has not been correctly declared, or
\n(b) Credit availed is not within the normal limits, ie there are instances of abnormal variation in credit amount.
\nHow can special audit be ordered or directed
\nSpecial audit under section 66 of the GST Act, 2017 can be ordered or directed:
\n (i) with prior approval of the commissioner,
\n (ii) by deputy or assistant commissioner,
\n (iii) in writing to the auditee tax payer,
\n (iv) to get records including books of account examined and audited,
\n (v) to get audit done by a chartered accountant or cost accountant nominated by commissioner (not by deputy or assistant commissioner).
\nSpecified form for special audit
\nAs per sub rule (1) of rule 102 of the GST Rules, 2017 with the prior approval of the Commissioner, the Assistant Commissioner or any officer senior to him can direct the registered person in FORM GST ADT-03 to get his records including books<\/p>\n
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\n(a) on application by taxable person, or
\n(b) on application by chartered accountant\/cost accountant, or
\n(c) for any other material and sufficient reasons.
\nThe discretion to extend time rests with the deputy\/assistant commissioner.
\nAs per sub rule (2) of rule 102 of the GST Rules, 2017 on conclusion of the special audit, the registered person shall be informed of the findings of the special audit in FORM GST ADT-04 by the auditor.
\nSpecial audit can be ordered even where taxable has been audited
\nThe special audit is an overriding provision and special audit can be directed even when accounts of taxable person are audited or subjected to audit under:
\n(a) any other provision of the GST Act, 2017, or
\n(b) any other law in force.
\nImpact of Special Audit
\nThe department is free to use the audit findings as well as material gathered during the course of special audit against the auditee tax payer. However, he shall be given an opportunity of being heard and defend himself following <\/p>\n
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