This article explains the audit process for Sindh Revenue Board (SRB).
Who Can Conduct Audits?
- An authorized officer of the Sindh Revenue Board (SRB), with a minimum rank of Assistant Auditor SRB, can conduct audits.
Audit Frequency:
- Generally, audits occur once a year for registered persons (businesses liable to pay SST).
Reasons for Additional Audits:
- The Commissioner SRB may order additional inquiries or investigations if they suspect tax fraud or evasion.
Audit Procedure:
- Notice of Audit: The SRB issues a notice informing the business of the audit and requesting relevant records.
- Preliminary Audit: The officer reviews submitted records and identifies potential tax violations or evaded amounts.
- Audit Observation: The officer issues a report outlining any discrepancies and the estimated evaded tax.
- Registered Person’s Response: The business has 21 days to respond to the audit observation with their explanation.
- Audit Report:
- If no response is received, or the response is unsatisfactory, the officer issues a final audit report.
- This report specifies the amount of tax owed, default surcharges, and any penalties.
- Order by SRB Officer: Based on the audit findings, an order is issued:
- Assessing the tax amount owed (Section 23)
- Determining penalties for non-compliance (Section 47)
Voluntary Tax Payment Options:
- Businesses can avoid penalties by voluntarily depositing:
- Short-paid tax
- Evaded tax
- Default surcharge
- This can be done:
- Before receiving the audit notice (filing a revised return)
- During the audit process (filing a revised return)
- Before receiving a show cause notice (filing a revised return)
Penalty Reductions for Voluntary Payment:
- Full voluntary payment before audit notice avoids penalties.
- Voluntary payment during the audit or before a show cause notice reduces the penalty to 20%.
Conclusion:
Understanding the SST audit process can help businesses ensure compliance and avoid penalties. It’s recommended to consult us for specific guidance.
