The Karnataka Government notified the salient features of electronic Scrutiny of High-risk cases, Audit Observations and DRC under Assessment module (e-shodane) under KGST Act, 2017.
The Audit is an important tool in tax administration to ensure compliance with the provisions of tax laws.
An e-Audit module has been developed by the Department in association with NIC, Karnataka and is being launched to undertake Audit and Assessment proceedings as per the provisions of the KGST Act. Procedure to be followed based on e-GST AUDIT Module is required to be specified. Hence, the following procedure and guidelines have been put in place to have uniformity in the department with regard to audit and assessment proceedings required to be undertaken under Section 65, 73 and 74 of KGST Act.
The e-Shodane provides an online platform system for the entire Audit Assessment process starting from selection of cases for audit, assignment of cases, communication with the Registered Taxable Person and ending with Audit Report passing of Assessment order. The module captures a log of the activities performed by the proper officers at different stages of the proceedings.
The Audit Officer has to conclude the Audit and inform the findings of audit, his rights obligations and reasons for findings to the RTP in Form ADT-02 within Thirty days from conclusion of Audit as required u/s 65(6). The Audit Officer shall complete the Audit within Three months from the commencement of audit as required under section 65(4). The time starts from the date on which records and other documents called for, are made available by RTP or actual institution of audit whichever is later.
The Audit Officer has to key in the date of commencement of audit at preliminary report menu and take due care to complete the audit commencement within the prescribed time limit.
If the Audit cannot be completed within the specified time, the Audit Officer has to request the Joint Commissioner (Admn.) for extension, who in turn, on satisfaction of reasons for such request, shall make recommendation to the Commissioner, through Additional Commissioner (Audit) for tension. The Commissioner may extend the time by a further period not exceeding Six months, for reasons to be recorded in writing. The Audit Officer shall exercise due diligence while requesting for extension of time limit, which has to be well in advance.
If the audit results in detection of tax not paid or tax short paid or tax erroneously refunded or ITC wrongly availed/ utilized and if the taxable person does not accept the findings of the Audit officer and fail to pay tax as per FORM GST ADT-02 and Audit report, the Audit officer shall proceed to conclude the demand & recovery proceedings under section 73 or 74 as the case may be by seeking separate assignment for the same.
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