• Notification Date: 08.02.2022
• Notification No: N/A

CBIC initiates Departmental Audits to enhance GST Compliance

The Central Board of Indirect Taxes (CBIC) has taken a new initiative of boosting GST Compliance by upgrading scrutiny and departmental audits of the taxpayers. This new step would be beneficial for the collection of goods and service tax (GST) from the risky taxpayers. The process would be carried out by using data and technology. According to Chairman Vivek Johri, this would make sure that the officers are making their decisions transparently. As per his anticipation, the indirect tax revenue sources of the central government would go through a shift. There will be a rise in the consumption of green mobile and a downturn in that of fossil fuel.

This would eventually lead to an increased service of electric vehicle charging stations. The service centres will be the main sources for collecting GST. A greater emphasis is being laid on tax compliance in domestic transactions. A wider tax base would be helpful in collecting revenues and making up for decreased fossil fuel usage.

CBIC Chairman, Mr Johri had said commented in an interview that the improvement in compliance after taking the new measures is quite evident in GST collections. There is a possibility of further improvement by taking up some more measures. He added that the GST department is required to scrutinize the tax returns to verify whether the figures are valid and if they compare well with the financials as reported by the business. CBIC is conducting departmental audits in the areas that have shown signs of discrepancies. A more systematic departmental audit and scrutiny have to be conducted to resolve the risk parameters.

Johri has also stated the procedure of conducting the audits. The risk factors and the necessary checks for mitigating the issues will be informed to the field officer. There is a difference between audit and scrutiny. An audit determines the finances of the assessors. It examines whether the finances are in agreement with the GST return reports.

The departmental audit will be conducted by data-driven and automated processes. By this method, the officials would receive transparent information about the tax returns and they would be able to examine the risk factors. The measures adopted by the central and state administrations have proven to be beneficial for the GST compliances.