CS Professional · Compliance Management, Audit and Due Diligence · Due Diligence
Orion Steels Ltd's CS is preparing a due diligence plan for acquiring a manufacturing unit. The team will verify pending assessments, tax demands, GST returns and past disputes with tax authorities. Which type of due diligence is being planned?
This is tax due diligence. Examining pending assessments, tax demands, GST returns and disputes with tax authorities identifies the target's tax exposures, unlike commercial due diligence, which assesses market and business viability.
- ACommercial due diligence
- BTax due diligenceCorrect
- CHuman resource due diligence
- DInformation technology due diligence
Explanation
Verifying pending assessments, tax demands, GST returns and disputes with tax authorities identifies tax exposures of the target, which is tax due diligence. Commercial due diligence concerns markets and business viability, not tax liabilities.
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