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CA Final · Indirect Tax Laws · Assessment and Audit

During the audit of Sahyadri Foods Ltd, the audit team notes discrepancies in the input tax credit availed. Which course of action is consistent with rule 101 of the CGST Rules, 2017?

The proper officer may tell the registered person about the discrepancies noticed, the person may file a reply, and the officer must finalise the audit findings after due consideration of that reply. Special audit directions or best judgment notices are separate procedures and are not required here.

  1. AThe officer may inform the person of the discrepancies; the person may reply, and the officer finalises the findings after considering the replyCorrect
  2. BThe officer must finalise findings without any communication, since the reply stage arises only in special audit
  3. CThe officer must issue a direction in FORM GST ADT-03 to a chartered accountant to examine the discrepancies
  4. DThe officer must issue a notice in FORM GST ASMT-14 proposing best judgment assessment before recording any findings

Explanation

Rule 101(4) lets the proper officer inform the registered person of discrepancies, allows a reply, and requires findings to be finalised after due consideration of the reply. ADT-03 is for special audit under section 66, and ASMT-14 is for best judgment assessment, so those options use the wrong provisions.

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