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TMI BlogThematic AuditX X X X Extracts X X X X X X X X Extracts X X X X ..... ant sectors may be extended greater facilitation and special focus may be directed to ensuring compliance on sectors with relatively low compliance scores. It is a value-adding approach that helps the Auditors to determine, consolidate and report high-level insights in the business transactions and practices prevalent in a particular type of industry/service sector. Theme-based audit may have both compliance and performance audit objectives. 8.1.2 Scenarios which may necessitate conducting thematic audit: The following scenarios may lead to a thematic audit. * Taxpayers in the same supply chain registered in same/different states; * Simultaneous audit of units which have same modus operandi of tax evasion and are registered across sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the Audit themes, the Committee may consider using the following parameters/ data sources: 8.1.4 Indicative parameters for selection of themes are given below:- * Economic indicators; * Third party information from Tax authorities and other Regulatory authorities; * Sensitive nature of the commodity and / or service; * Risky sectors in news for frauds for e.g., E-commerce, online gaming, jewellers etc.; * Sectors directly involved in providing services to a large consumer base, such as banking, insurance, air and land travel, utilities etc. * Sectoral revenue and value addition trends and variations therein * In addition to above, risky themes identified by the State and Central Tax Authorities based on local interventio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax) for conducting thematic audit Theme-based audit of a selected Taxpayer would be conducted by the concerned GST audit authority (i.e. the jurisdictional central or state audit officer). Considering the importance of thematic audit, it is imperative to allocate appropriate resources/staff in each of the Audit formation. The Head of the Audit formation in the State/Centre may like to specifically earmark appropriate staff (Audit Groups) exclusively for Thematic Audit. Even separate nomenclature may be adopted for such audit groups. It is emphasised that the Audit groups should be provided with proper infrastructure for efficient handling of the Audit work. Audit groups dealing with Thematic Audits should be given proper training to dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittee of Officers for conduct of thematic audit shall also indicate a date on which audit of all such taxpayers irrespective of their jurisdiction (whether under Centre or State) shall commence. f) After conduct of audit, all the Audit Groups shall prepare their observations and convey to the taxpayer (s) for their written response to these observations. In their written response, the taxpayer is expected to communicate their agreement or disagreement as the case may be to the observations pointed out by the Audit Group. After taking into account the written response from the taxpayer, the Audit Group shall prepare the draft audit para(s). g) The Audit Group shall forward their draft audit para(s) to the Committee of Officers for approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in agreement with the audit para and is not willing to pay outstanding GST along with interest and penalty, the audit groups shall prepare demand cum show cause notice to be adjudicated by the appropriate Tax Officer. Before issue of demand cum show cause notice, the taxpayers may be given pre-consultation so as to give them one more opportunity to explain their point of view to the senior tax officers before a final decision is arrived at. The Tax Authorities may also use this opportunity to explain the department's view point to the taxpayers and encourage them for voluntary compliance. This will reduce unnecessary litigation which is good for both the taxpayer as well as the government. l) After adjudication proceedings, recovery acti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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