TaxTMI 
TaxTMI 
Audit of Service Tax assesses/records
X X X X Extracts X X X X
X X X X Extracts X X X X
....service. Once this study is completed 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 profo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 Shipping Agency Pvt. Ltd. Kolkata.1 7 Inter Ocean Shipping India (P) Ltd. Delhi.1 8....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 Hanu Reddy Realty Chennai-II 4 Residency Properties & Development Ltd. Chennai-II 5 N.K. Agarwal Estate(P) Ltd. Kolkata.1 6 Champalal & Co. Kolkata.1 7 C.B. Richards Ellis South Asia Pvt. Ltd.. Delhi.1 8 Cushman ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 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') 5. Working Papers (Annexure - 'w/p - 'A' to '—') PART-1 SUMMARY OF AUDIT REPORTS 1. Name & Address of the Taxpayer M/s ABC, -------- 2. Its HO, Regional/ Branches offices etc. 3. Status of the Taxpayer 4. Jurisdictional Commissionerate/ Division/ Range Name of the Range Supdt/Inspector Commissionerate - Division - Range - Shri: 5. Name of taxable services provided to clients 6. Registration No. 7. Exemption Notifi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ative 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). Organisational Information: [Identify the head Office/ registered office or regional/ branch offices of the taxpayer, location of its operations and location of its accounting records. Also the offices who are billing services] C). Organisational Type and Ownership: [Confirm organisation, whether proprietorship, partnership or a Pvt Ltd or Ltd company] D).Organisation Chart: [Obtain the organisation chart or describe the organisation structure if chart is unavailable. Note responsibilities of key personnel and any recent changes, particularly in personnel involved in tax accounting.] 2.2 Financial and Tax Accounting Information: A). Business Records:....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hin 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). Walkthrough - Other System(s): [Perform a walkthrough of any other system (e.g. Journal Entries & other adjustments etc.). Trace a sample of transactions, of all types from source documents through to the service tax account. Amend systems descriptions to match findings in the walkthrough.] E). Walkthrough - service Tax Return: [Perform a walkthrough of the process of compiling a tax return for one quarter/ six months, tracing from tax return amounts through to their sources. Amend systems descriptions to match findings in the walkthrough.] F). Postings to the General Ledger: [Test postings from the books of original entry, i.e. Service and other journals, to the General Ledger. Verify that taxes are correctly recorded.] G). TAXES in GL: [Verify mathematical accuracy ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rall 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 invoices being issued to ascertain the rates being charged for past and present. Similarly, expenses incurred (including Capital Investment) as compared to Income should also be examined 7. Audit Plan: [The audit plan must be based on information gathered so far before starting the audit and must be specific.] SR AREA PERIOD SELECTION CRITRIA VERIFICATION COMMENTS ALLOTTED TO SHRI (INSP.) (i) (ii) (iii) (iv) (v) (vi) 1. Registration - (i) whether registration done as per Board's Circular No 35/3/2001 CX dt 27.8.2001; (ii) since it is not transferable, whether the registration is in the name of the person who actually engaged in the providing of services 2. (i) Whether the tax is paid in the designated bank under proper TR-6 challan and the Tax-return is filed in time; (ii) whether amende....
X X X X Extracts X X X X
X X X X Extracts X X X X
....greement 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 assessment. Where extra time is requested to review the assessment, set up a log for follow-up.] 11. Collections of Audit Assessment: [Where the taxpayer agreed and made a payment, in full or in part, note details of the payment received. In case where substantial amount remains outstanding, provide your comments on taxpayer's ability to pay, considering his present financial situation. Obtain information to assist in future collection, e.g. Bank(s), assignment of equipment and receivables, major creditors etc., attach additional working paper as necessary.] 12. Future Compliance: [Indicate information provided and specific actions suggested to the taxpayer to improve compliance. Where the taxpayer is in agreement with the suggestions, request a commitment in writing and include it in the audit report. If the taxpayer is unwilling to give a written undertaking, obtain a verbal commitment and note it down.] 13. PROCEDURAL PARAS: [DIFICULTY FACED IN....