Frequency Norms of Audit for Service Tax Assessees

Frequency Norms of Audit for Service Tax Assessees

            Director General of Audit, New Delhi has prepared Service Tax Audit Manual, 2010.  As per the guidelines, tax payers whose annual service tax payment (including cash and CENVAT) was Rs.3 crore or more in the preceding financial year may be subjected to mandatory audit each year.  It is preferable that Audit of all such Units is done by using Computer Assisted Audit Program (CAAP) techniques.  The frequency of audit for other taxpayers would be as per following norms:-

i.              Taxpayers with Service Tax payment above Rs.3 crores (Cash + CENVAT) (MANDATORY UNITS) – to be audited every year.

ii.             Taxpayers with Service Tax payment between Rs.1 crore and Rs.3 crores (Cash + CENVAT) – to be audited once every two years.

iii.            Taxpayers with Service Tax payment between Rs.25 lakhs and Rs.1 crore (Cash + CENVAT) – to be audited once every five years.

iv.            Taxpayers with Service Tax payment upto Rs.25 lakhs (Cash + CENVAT) – 2% of taxpayers to be audited every year.