Coordinated audit Framework laid down by Director General (Audit)

[K.lakshmipati rao]

Dear Experts,

Our Company is having multiple GST Registrations in the States of Uttar Pradesh, Karnataka, and West Bengal etc., for which, GST Audit initiated u/s. 65 of CGST Act and intimated through GST ADT-01. Furnishing the relevant information and compliance thereof, is in routine nature and it is Taxpayer responsibility.

Whereas, as a part of Coordinated audit Framework laid down by Director General (Audit), appointed the Commissioner of Uttar Pradesh GST Commissionerate as Nodal Audit Commissionerate for our PAN, for conducting Audit in respect of all three State transactions for the purpose of 'Thematic Audit'.

As such, we were advised to designate Single point of Contact-Taxpayer (Senior Accounts/Finance Official, who shall interface with the above designated Nodal Audit Commissioner for all three States Business transactions for the audit period F.Y.2020-21 to 2023-24.

Due to huge volumes, consolidation of Records and furnishing of information for each GSTIN itself is huge task for us, yet again, further consolidation of information belongs to three States is much bigger task for this proposed 'Thematic Audit'. This amounts to Extra work for Taxpayer, since integration of selected GSTIN is herculean task at this point in time.

May I request Experts to suggest in the matter as to whether the Coordinated audit Framework laid down by Director General (Audit) has GST counsel approval. If so, under which GST Rule, permission given to the Nodal Audit Commissionerate for coordination and communication between Taxpayer [PAN based] and the various Audit Commissionerate conducting the GST Audit.

[YAGAY andSUN]

Under Section 65 of the Central Goods and Services Tax Act, 2017, the department is empowered to conduct audit of a registered person, and such audit is to be carried out by the Commissioner or officers authorised by him in respect of that registered person (i.e., GSTIN-wise registration). The procedural aspects are prescribed under Rule 101 of the Central Goods and Services Tax Rules, 2017, which provide for issuance of ADT-01 and calling for records. The Act and Rules do not expressly provide for a PAN-based consolidated audit by a "Nodal Audit Commissionerate." However, the Board, through administrative instructions issued under Section 168 of the CGST Act, has operationalised a Coordinated/ Thematic Audit Framework to avoid duplication of audit efforts and to ensure uniform examination of issues across multiple GSTINs under the same PAN. Such instructions are departmental in nature and are binding on field formations, though they cannot override the statutory scheme of GSTIN-wise registration.

Accordingly, designation of a single point of contact and centralised coordination by a Nodal Commissionerate is an administrative facilitation measure rather than a separate statutory audit proceeding. Legally, each GSTIN remains a distinct "registered person," and audit findings, observations, and proceedings must be GSTIN-specific. While the department may coordinate internally for thematic risk assessment across States, any demand, objection, or adjudication must be initiated jurisdiction-wise in accordance with Section 65 read with Rule 101. If the compliance burden becomes disproportionate, a formal representation may be made to the Nodal Commissionerate seeking GSTIN-wise submission of data rather than PAN-level consolidation, citing statutory registration distinctiveness under Section 25 of the CGST Act.

[K.lakshmipati rao]

Thank you, M/s. YAGAY AndSUN, for your quick response and guidance.

[Raam Srinivasan Swaminathan Kalpathi]

Respected Sir

Audit u/s.165 is a biennial or triennial excercise undertaken by the GST department. We had gone through the same for some of our clients and the exercise to say the least is excruciating, but cannot be avoided. I would sincerely suggest concentration of energies on substantive issues rather on technical or procedural aspects. Also, completion of audit does not guarantee immunity from further Notices. Recently one of our clients post completion of audit for the triennial period 2020-23 got a Section 61 Scrutiny Notice from department and upon the advise of TMI expert panelists we went through the rigours one more time. Nevertheless, there was no major damage caused and we were also able to obviate future litigation with the department. Thanks and best wishes

AI Summary

GST audit framework: administrative nodal coordination enables thematic PAN-level review while audits remain GSTIN-specific. A centralised Coordinated Audit Framework permits administrative PAN-level coordination via a Nodal Audit Commissionerate to conduct thematic reviews, but statutory audit authority and procedural notices remain registry-specific and must be pursued GSTIN-wise under the prescribed audit procedure rules; designation of a single point of contact is an administrative facilitation and taxpayers may seek GSTIN-wise processing if PAN-level consolidation causes disproportionate burden.