Special Audit - Service Tax Practice Manual / Ready Reckoner - Service Tax

Special Audit Section 72A of Finance Act, 1994 w.e.f. 28-5-2012 makes provision for special audit by practicing Chartered / Cost Accountant. Who can order for a special audit Principal Commissioner of Central Excise or Commissioner of Central Excise can be ordered for special audit. The provision of special audit applies even if audit was conducted under some other law. Circumstance in which special audit can be ordered If the Principal Commissioner of Central Excise or Commissioner of Central Excise has reason to believe that any person liable to pay service tax- -has failed to declare or determine the value of taxable service correctly -has availed and utilised credit of duty or tax paid including by means of fraud, collusion, or any wilful misstatement or suppression of facts -has operations in multiple locations and it is not possible or practicable to obtain a true and completer picture of his accounts from the registered premises The Chartered Accountant or Cost Accountant shall, within the period specified by the commissioner, submit a report duly signed certified by him, mentioning such other particulars as may be specified. The auditee shall be given opportunity of hearing in respect of any material gathered on the basis of such special audit and proposed to be utilised in any proceedings against him. Notification No.23/2014-ST dated 5 th December, 2014 Rule 5A (2) of Service Tax Rules, 1994 Every assesse shall, on demand make available to the officer empowered under sub rule (1) or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India or a Cost Accountant or Chartered Accountant nominated under section 72A of the Act . Special audit and visit to premises of the service provider is under Challenge - Delhi High Court and Calcutta High Court has decided the issues in favor of assessee. See:- 2016 (6) TMI 163 - DELHI HIGH COURT - Mega Cabs Pvt. Ltd. Versus Union of India Ors. and 2016 (7) TMI 875 - CALCUTTA HIGH COURT Magma HDI General Insurance Company Ltd. Versus Union of India Others