CBIC has unveiled a common audit plan for both central and state Goods and Services Tax (GST) officials when auditing banks.
In a significant development aimed at streamlining audit procedures, the Central Board of Indirect Taxes and Customs (CBIC) has unveiled a common audit plan for both central and state Goods and Services Tax (GST) officials when auditing banks. This move of CBIC aims to provide banks with greater clarity and certainty regarding audit processes, as officials will now adhere to a unified audit plan.
According to CBIC Chairperson Sanjay Kumar Agarwal, the common minimum audit plan, released in April, offers comprehensive guidelines to ensure that audit officers from both central and state levels function in an efficient, focused, transparent, and coordinated manner. This initiative of CBIC marks a notable collaboration between the Centre and the states in implementing indirect tax regulations.
GST audits are crucial for verifying the accuracy of declared sales, taxes paid, refunds claimed, and input tax credit availed by scrutinizing tax returns and business records. Any discrepancies uncovered during audits could raise concerns.
Rajat Mohan, Executive Director at MOORE Singhi, emphasized the importance of such a common audit plan, particularly in complex industries like banking. He suggested that similar plans could benefit sectors such as insurance and telecom by facilitating comprehensive and holistic audits.
Agarwal also highlighted a recent agreement between Indian and Australian authorities aimed at fostering greater trust-based facilitation for merchants from both countries. This agreement involves mutual recognition of authorized economic operator (AEO) programs, which provide certain privileges to trusted merchants to enhance ease of doing business.
AEO programs offer a range of benefits, including expedited clearance of shipments at ports, reduced inspection charges, faster tax refunds, deferred duty payment options, and acceptance of self-declared goods origin. Signing mutual recognition agreements (MRAs) with other countries extends these privileges to merchants and brokers engaged in international trade, allowing them to avail of benefits in countries with which India has signed MRAs.
In summary, the introduction of a common bank audit plan by CBIC signifies a concerted effort to streamline audit processes and enhance transparency in the GST regime. Additionally, agreements such as mutual recognition of AEO programs contribute to facilitating smoother international trade operations for merchants.
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