GST audit guidelines need to be reviewed to include video conferencing: Experts

GST officers would have to audit and assess taxpayers via video-conferencing instead of undertaking physical visits amid the coronavirus pandemic, and the current guidelines need to be reviewed for this, according to experts.

As per the current goods and services tax (GST) audit guidelines, taxpayers have been broadly categorised into three groups based on their annual turnover -- large, medium and small.

While large and medium units are compulsorily under premises-based audits; for small units, desk-based audit has been suggested.

However, in the case of non-cooperative taxpayers or any inherent weakness of the internal control system, officers could shift back to the premises-based audit.

Last month, the Central Board of Indirect Taxes and Customs (CBIC) issued instructions requiring officers to hold a personal hearing in respect of customs law, central excise and service tax laws through the video-conferencing facility.

Experts said that with the audit for the financial year 2017-18, the first year in the GST regime, yet to begin, the tax officers would need to review the audit guidelines and include video conference facility along with strengthening the risk management system to flag risky cases.

PwC India Partner National Leader (Indirect Tax) Pratik Jain said GST audit and assessment for 2017-18 will start soon and the department will have to review the audit guidelines.

"The current guidelines talk about physical visits to premises of large business for say 7-8 days and conducting audit. With social distancing being a 'new normal' now, GST officials might have to explore more virtual verifications," Jain said.

The government will have to take a re-look at its risk management system and devise better ways of assessing taxpayers, he added.

AMRG & Associates Senior Partner Rajat Mohan said one segment of the CBIC, which is Customs, has already embraced the use of technology, and now it is expected that GST having more than 1.2 crore taxpayers would also introduce such facility in all the departmental functions including assessments, adjudications, appeals, and audit.

"Introducing a video-conferencing facility in all the tax laws is imperative to the business continuity plan of the economy, otherwise, this pandemic will result in inordinate delay in the delivery of justice," Mohan added.