Special Audit in the Areas of Excess Credits: An article by IDTC (ICAI)
IDTC of ICAI has published an Article on ‘Special Audit in the Areas of Excess Credits’, which refers to about 71 areas where excess credit/ transitional credit may be taken, for consideration while conducting such audit, as under:
In order to check “frivolous and fraudulent” tax credit claims by businesses, the CBEC has decided to verify demands of top 50,000 tax payers claiming maximum GST transitional credit, starting with those where the quantum exceeds Rs. 25 lakh.
The verification of “unreasonable” transitional credit claims would be conducted in four phases. In the first phase, the tax officers will verify transitional credit claims where the growth is more than 25 per cent or the credit availed is in excess of Rs 25 lakh. One third of the remaining claims of 50,000 taxpayers will be verified in three phases, i.e. i) July-September 2018, ii) October-December 2018 and iii) January-March 2019.
Credit verification will remain one of the focus areas in 2018-19. One of the important tools for credit verification available with the government is special audit u/s 66. As per section 66, at any stage of scrutiny, inquiry, investigation or any other proceedings direction to registered person to get accounts examined and audited can be given.