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TMI BlogAudit of Service Tax assesses/recordsX X X X Extracts X X X X X X X X Extracts X X X X ..... ted it is proposed to bring out a comprehensive Service Tax Audit Manual on the lines of the manual issued for Central Excise Audit Till then, the following guidelines are prescribed for immediately initiating audit of selected service tax assessees . 4. Only those assesses will be taken up for audit who are registered in the Metropolitan cities of New Delhi, Mumbai, Chennai and Kolkata and whose names are given in Annexure - I . 5. In respect of Stock broking, Telephones and non-life Insurance, audit will continue to be done as per norms indicated in Board's Circular of 21.11.96 and selection of assessees by the Commissioners. In respect of these three services the Audit will, obviously, not be confined to metropolitan cities only. 6. The Audit of assesses listed in Annexure-I should be confined to the accounts for the years 1999-2000 onwards only. In respect of services which have been brought under the tax net in July, 2001, the Audit period will be July 2001 till the date of Audit. The Audit of each selected assessee should be completed in not more than 10 working days. 7. The audit would be conducted as per proforma Annexure- II (enclosed). This proforma is based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Safe Express Pvt. Ltd. Kolkata.1 7 Overnite Express Ltd. Delhi.1 8 Blaze Flash Couriers Pvt Ltd Delhi- I 4 CHA 1 Damani Shipping Pvt. Ltd. Mumabi-1 2 Babaji Sriram Cleaning Carriers (P) Ltd Mumabi-1 3 Vignesh Freight Forwarders Chennai-I 4 National Clearing Shipping Chennai-I 5 Lee Muirhead Ltd. Kolkata.1 6 Ripley Co. Ltd. Kolkata.1 7 Lee Muirhead Ltd. Delhi-I 8 P.S. Bedi Co Delhi.1 5 Steamer Agents 1 Freight Systems India Pvt. Ltd. Mumbai-IV 2 Samrat Shipping Transport Systems Pvt.Ltd Mumbai-I 3 German Express Shipping Agency (I) Pvt. Ltd. Chennai-I 4 A S Shipping Agency P Ltd. Chennai-I 5 Sea Horse Ship Agencies Pvt. Ltd. Kolkata.1 6 Imsa Shippi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odhar Mumbai-IV 2 Bhuchar Chandak Mumbai-IV 3 Price Waterhouse Chennai-II 4 Brahmaya Co Chennai-I 5 Pricewater House Kolkata.1 6 Lovelock Harris Kolkata.1 7 S.R. Batliboi Co. Delhi.1 8 Price Water House Delhi-I 11 Market Research Agency 1 ORG MARG Mumbai-1 2 Indica Research Pvt. Ltd. Mumbai-I 3 Francis Kanoi Chennai-II 4 ORG Marg Chennai-II 5 C. MARC (India)Pvt. Ltd. Kolkata.1 6 ORG- MARG Research Ltd. Kolkata.1 7 Hindustan Thompson Associates Ltd. Delhi.1 8 ORG Marg Research Consultancy Group (P) Ltd Delhi- I 12 Real Estate Agents 1 Mahindra Realty Infrastructure Ltd. Mumbai-IV 2 Raheja Construction Pvt. Ltd. Mumbai-IV 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F THE COMMISSIONER OF CUSTOMS CENTRAL EXCISE, INTERNAL AUDIT BRANCH, ---------------- F.No. ---------------- Dated --- February, 2002 To, Assistant Commissioner, Customs Central Excise, -------- Sub: - Audit Report drawn in respect of Taxpayer - M/s ABC for the period: ----------------------. Enclosed please find Audit Report drawn in respect of Taxpayer - M/s ABC for the period: ----------. In this connection, you are requested to please take immediate suitable action to safeguard government revenue under intimation to the audit. Enclosure - --------- (XYZ) ASSISTANT COMMISSIONER (AUDIT) Copy to - The Deputy Commissioner (Prev), Central Excise Hqrs, --------for information. The Superintendent, Central Excise Range ---- The Audit Report Master file (XYZ) ASSISTANT COMMISSIONER (AUDIT) Index SR. NO. ITEMS PAGE NO. 1. Summary of audit reports 1 2. Summary of audit results 3. Detailed Audit Para (Annexure - 'A') 4. Enclosures (Annexure - 'B') ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... review: [Review audit file to determine nature of the organisation, its operations, service provided, results of last audit and the reasons it was selected for audit this time.] 1.2 Review information in Range Office: [Review information available in the Range office, i.e. Returns filed, Tax paid List of records/returns filed. Check if any anti evasion action is in progress] 1.3 Review Amendment in Laws: [Review amendment in laws after the last audit and its compliance] 1.4 Develop tentative plan for audit, identifying potential area for audit: [Where necessary, discuss tentative plan with the AC/DC or JC/ADC] SR. NO. AREA PERIOD SELECTION 1. 2. 3. 1.5 Contact tax payer set up an appointment: [Keep a log where taxpayer appears to be stalling.] 2. Gathering and Documenting Systems Information: 2.1 Interview organisational information: A). Person (s) Interviewed and Title: [Name of the persons who have been interviewed and their statements in brief] B). Organisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Premises: [Tour the premises accompanied with appropriate personnel. Observe operations to confirm information received to date and to note areas that may be vulnerable to non-compliance. Ask about the number of workers in the organisation and if any shift work is done. This may not be needed in case of majority of services generally] 4. Evaluation of the Internal Controls: 4.1 General/ Tax Accounting: A). System Review: [Review and describe Service (Revenue) and tax Accounting and any other service tax related systems. Summarise the flow of information, procedures used for recording transactions and indicate person responsible for various functions.] B). Controls that impact TAXES: [Identify and describe any internal controls within these systems that have an impact on accounting for service tax. Check if there have been any system or personnel changes in key areas. If yes, review the changeover period with care.] C). Walkthrough - Service System: [Perform a walkthrough of the Service/ Revenue System. Trace a sample of transactions (all types). Amend systems descriptions to match findings in the walkthrough.] D) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al controls within the Service/ Revenue system on which you can rely.] G). Other internal controls: [Review other key controls that prevent or detect under-valuation of service tax.] H). Conclusions: TABLE -14 ITEMS CONCERNS General / Tax accounting: Service 5. ANALYSIS, AUDIT PLAN ASSESSMENTS 1. Risk Loss Analysis (Reasonableness Tests): A). service tax: [Prepare the risk loss analysis, covering a period of one year or a minimum of one return, for service tax and provide your conclusions as to the significance of the potential revenue loss. Indicate possible problems and therefore the audit steps that might be indicated.] [NB - A SAMPLE RISK LOSS ANALYSIS FORMAT IS GIVEN AS PER ANNEXURE -'A' ] 6. Trend Analysis [Perform appropriate trend analysis to check the overall reasonableness and consistency of data provided by a taxpayer. Identify potential problem areas and audit steps required verifications of tax implications.] Auditors should verify the invoices/Bills issued for audit period and the same should be compared with present i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is correctly availed 8. Verification of taxable service from other records / returns -whether the taxable service has been cross verified from other records/ returns (i.e. such returns which are filed with government or financial institutions) maintained by the taxpayer. 8. Verification: [Carry out verification as planned. Note W/P Ref. in the last column of audit plan above. Where audit plan had to be altered, provide suitable comments ] 9. Summary of Audit findings and assessment [Once the verification, as per the audit plan, is complete, all of the assessments must be rolled up for presentation to and discussions with the supervisor and the assessee.](The results must be presented in a logical manner and should be cross- indexed so that it would be easy to follow both by the assessee and Departmental officers). 10. Assessee agreement/ disagreement with the reassessment: [Make a note of the date and name of person (s) present when the results of the audit were discussed with the assessee. Indicate their agreement or disagreement, with all or part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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