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TMI BlogMANAGEMENT OF CENTRAL EXCISE AND SERVICE TAX AUDITX X X X Extracts X X X X X X X X Extracts X X X X ..... audit techniques and procedures through a periodic review. With the help of its Zonal units, the Directorate General of Audit regularly monitors Central Excise and Service Tax audits conducted by the Commissionerates to ensure that the coverage of Assessees/Taxpayers is adequate in number and is reflective of their risk profile and to ensure that these audits are conducted in accordance with the letter and spirit of EA 2000 methodology. To achieve this, the Directorate needs to interact closely with Principal Chief Commissionerates/ Chief Commissionerates to eliminate the deficiencies and to improve the Audit performance of the Commissionerates. 2.2.1 As an advisor to the Board, the Directorate General of Audit is required to suggest measures for enhanced tax compliance, to gauge the level of audit standards and to ascertain the views of the Assessees/Taxpayers on the existing audit system. It should also interact with select Assessees/Taxpayers to take a holistic view of the internal audit and to formulate proposals to remove bottlenecks and obviate the scope of irregularities. 2.2.2 The selection of assessees and taxpayers would be done based on the risk evaluation me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide facility of Appraisers for conducting of OSPCA xii. Assigning the audit of an assessee/ taxpayer, in case of integrated audit, to a particular Audit Commissionerate, within the Zonal jurisdiction, based on payment of Central Excise duty or Service tax whichever is higher. xiii. Selection of theme, planning and execution of Theme based Audit. xiv. Ensuring that the services of a Computer Assisted Audit Programme Centre are available to all Audit Commissionerates in the zone and the officers trained in CAAP techniques are retained for a sufficiently long tenure. 2.4 Functions of an Audit Commissionerate: The Audit Commissionerate comprises of the following sections: i. Planning and coordination section: To schedule and to provide support in conduct of Monitoring Committee Meetings (MCM); to maintain and to keep a copy of assessee master file and update it in coordination with the audit groups of circles; to maintain records/registers; to submit reports; to look after formation/constitution of audit groups; deployment of officers, matching skills with audit requirement; to maintain database of officers profile; to monitor training needs of officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offline Audit Report Utility and no paper based audit report is prepared.Also to ensure that after the MCM, each Audit Report Utility is uploaded in ACES v. To liase with DG (Systems) to ensure that EDW data and ACES data is available to the auditors vi. To ensure that requisite follow-up action i.e. recovery, issue of show cause notice is taken. vii. To review audit performance and to take steps for improvement. viii.To take remedial measures based on the report of audit group on performance appraisal and quality assurance. ix. To review the performance and participation of the Additional/ Joint Commissioner and Deputy/ Assistant Commissioner of audit circles. x. To interact with the major assessees/trade associations, to obtain feedback on the audit system. xi. To assess the training needs of the auditors and organize training programmes. xii. To submit periodical reports to various formations including Zonal ADG (Audit) or Director General (Audit) as prescribed from time to time. xiii. To order special audit in terms of Section 14AA of the Central Excise Act, 1944, and Section 72A of the Finance Act, 1994, on his own or on the basis of a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioners in-charge of Circles: i. Co-ordination, planning and overall management of the audit circle. ii. To monitor maintenance of assessee master files and registers. iii.To approve the desk review and audit plan, in respect of all the small units, after ensuring that all the steps have been completed. iv. To interact with assessees/taxpayers at the time of audit in order to share major audit findings and compliance issues. v. To issue show cause notices answerable to Deputy/ Assistant Commissioner of the Executive Commissionerate under intimation to Audit Commissionerate Hqrs. vi.To prepare and forward draft show cause notices, answerable to Joint/Additional Commissioner and Commissioner, to Audit Commissionerate Headquarters. vii.To approve and issue draft audit reports before attending the MCM meeting. viii. To issue final audit reports after approval in the MCM meeting. 2.6 Role of Executive Commissionerate: i. To represent inMCM; ii. To respond to the audit objections, within 15 days of receipt of the minutes of the MCM; iii. To provide detailed comments with a justification on the disputed audit paras including the details of Board s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should interact with the management of the unit. vi. Audit circle comprises of one stationary audit group (MIS) to look after the work relating to planning and co-ordination section of Hqrs Office, such as MCM, maintenance of Assessee Master Files, processing of draft show cause notices, attending to follow up work etc. and deployment of audit groups for conduct of audit. vii. The Audit Groups deployed for audit of large units may comprise of 2-3 Superintendents and 3-5 Inspectors. For medium units, the audit group may include 1 - 2 Superintendents and 2 - 3 Inspectors. For small units, the Audit Group may include 1 Superintendent and 1 - 2 Inspectors. viii. Groups for large units, medium units and small units should be in such numbers that the following distribution of manpower deployment in audit groups is achieved. a. 40% of manpower for large units including audits of MLUs, MLSPs and theme based audits b. 25% of manpower for medium units c. 15 % of manpower for small units d. 20% of manpower for planning, coordination and follow up. 2.8 Auditors Profile: Profile of each of the auditor posted in the groups should be available in the Audit Plannin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Audit Officers and would also lead to uniformity in the type of objections that are raised to particular service providers. Basing on the said grouping, the audit of services pertaining to particular group can be allocated to the specific team(s), depending upon the requirement so that the services of the team which has specialised skills can be optimally utilised. However, Audit teams can be reconstituted in accordance with the local needs. 2.8.4 Officers, when posted to the Audit Commissionerate for the first time, should invariably be sent for training in EA 2000 and financial accounting so that they have the basic skills to handle audit work. Compulsory in-house training programmes could also be organized in the Audit Commissionerates for the benefit of new entrants soon after the annual transfers. The Audit Commissioner should also ensure to organise special training programmes for major industrial sectors in the jurisdiction of an Audit Commissionerate so that auditors have the necessary specialization and sufficient number of auditors specializing in major industries are available. Officers, who have worked in audit sections earlier, should also be imparted wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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