Menu Close

Tax authorities step heat up on erring companies with GST audit

Tax authorities step heat up on erring companies with GST audit

GST audits are being initiated as part of the government’s drive to increase compliance and step revenue collections up amid an economic downturn.

Central GST authorities have begun issuing audit notices to businesses posing a revenue leakage risk, a person aware of the development said on condition of anonymity. All businesses with more than $ 2 crore annual earnings are expected to get their books audited for GST compliance and the authorities order another compliance audit only in specific cases where they suspect lapses.

GST is a technology-driven tax and its return filing system raises red flags where it detects mismatches in transactions reported by companies in the value chain, allowing officials to profile the businesses based on their compliance track record.

The audit ordered by the authorities seeks to verify the turnover announced, taxes paid, refund claimed and input tax credit availed. It will also evaluate the business’ compliance. According to Rajat Mohan, senior partner at chartered accountants firm AMRG & Associates, the audit attempts to check revenue leakage chances. It requires businesses to provide a plethora of documents including income tax returns to convince the auditor that the sales reported in GST filings is just like that reported in the income tax returns too. “Taxpayers may have a hard time reconciling various data points made available by the GSTN portal, e-way bills portal, the FastTag database, Income tax department and MCA portal,” said Mohan.

As per the latest deadline, they have time till 31 January to file their audit reports.

Leave a Reply

Your email address will not be published. Required fields are marked *