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FBR issues procedure for conducting e-audit

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued procedure for conducting electronic audit by officers of Inland Revenue.

An amendment was introduced to Sales Tax Act, 1990 through Finance Act, 2020 under which commissioner of Inland Revenue authorized to conduct audit proceedings electronically through video link or any other facility as prescribed by the FBR.

The FBR now made amendments to Sales Tax Rules, 2006 to implement the law introduced through Finance Act, 2020.

The FBR said where a case has been selected under section 25 or section 72B of the Sales Tax Act, 1990, as the case may be, and the competent authority issues directions to conduct e-audit, the following procedure shall be adopted:

(a) the concerned commissioner Inland Revenue shall serve a notice under sub-section (1) of Section 25 of the Act to the registered person specifying the reasons for selection of his case for audit;

(b) The commissioner Inland Revenue having jurisdiction shall assign the case to an audit officer to conduct e-audit.

(c) A registered person shall produce the record as required to be maintained under section 22 of the act through IRIS or an electronic data carrier as notified by the Board;

(d) a registered person shall not be required to appear either personally or through authorized representative in connection with any proceedings under e-audit before the audit officer:

Provided that a registered person may request for an opportunity of personal hearing through IRIS and such hearings shall be conducted exclusively through video links from personal computer system or any of the nearest tax facilitation center situated at the premises of the field formations.

(e) the audit officer after considering all the information, documents or evidence, if the audit officer finds no discrepancy and have no conclusive proof against registered person, he may close the audit in IRIS under intimation to the commission inland revenue having jurisdiction;

(f) after completion of audit, examination of record and obtaining registered person’s explanation on all the issues raised, if the audit officer does not agree with the declared version, he shall prepare an audit report, containing audit observations and finding. The audit officer shall forward the report to the commissioner Inland Revenue having jurisdiction and also send a copy of it to the registered person through IRIS;

(g) the commissioner inland revenue having jurisdiction shall assign the case to an adjudication officer to make an order for assessment of tax under section 11, including imposition of penalty and default surcharge in accordance with section 33 and 34 of the Act;

(h) on the basis of the audit report referred to in sub-rule (e), the adjudicating officer shall issue a show cause notice through IRIS to the registered person; and

(i) the adjudicating officer may, if considered necessary, after obtaining the registered person’s explanation on all the issues raised in the audit report, pass an order under section 11 of the act.