Union govt to set up online audit mechanism under GST, says Parliamentary panel

The Union government has accepted the proposal put forth by a parliamentary panel on ‘anti-competitive practices by big tech companies’ and will establish an online audit mechanism for the Goods and Services Tax (GST). The aim is to streamline the GST audit process and make it more efficient.

The standing committee on finance, which made the recommendation, expects the ministry to actively pursue the implementation of the online audit mechanism. They also wish to be informed about the outcomes when presenting the final action taken statement.

To facilitate this process, the Central Board of Indirect Taxes and Customs(CBIC) has already released the GST Audit Manual, which outlines the necessary documents for the audit, audit timelines, and standard formats. Taxpayers can submit the required documents and records via email, and any clarifications sought by tax officers can also be provided through email.

Also Read: GST Audit for FY 2023-24: Checklist, Due Date and Penalty

According to the corporate affairs ministry, the current audit functionality allows for online audits, wherein taxpayers and tax officers can upload and examine the required documents electronically.

The panel recommended the online audit mechanism because the traditional audit process required a large number of documents from taxpayers and often involved physical appearances at GST offices, causing inconvenience and consuming significant time for both taxpayers and officials.

In response to the panel’s recommendation, the government has been asked to prepare a white list of documents needed for conducting online audits. This white list will serve as a guidance note for both officers and assesses.

Furthermore, to prevent harassment of honest taxpayers during searches and seizures, the committee proposed specific measures, including the installation of CCTV cameras in the interrogation rooms. The corporate affairs ministry has instructed the Central Board of Indirect Taxes and Customs to implement this recommendation.

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