The Federal Value Added Tax (VAT) Act 2010 has strictly restrained the Federal Board of Revenue (FBR) from conducting multiple audit of a taxpayer in the same tax period to save business community from undue harassment. Sources told Business Recorder here on Saturday that the Federal VAT Act has introduced a new section 71 ie 'No multiple departmental audit in normal circumstances'.
According to this section, no registered person shall be audited by the officers of any LTU, or as the case may be, RTO twice for the same period unless the Commissioner has any reliable information or otherwise about tax fraud by any registered person during the audited period and specifically order re-audit.
The audit by the Inland Revenue or as the case may be, special audit shall be in addition to the audit conducted by any other government department or agency. According to the procedure, the officer of Inland Revenue authorised by the Board may conduct audit, including forensic audit, of any registered person giving advance notice provided that such notice may be issued by the Commissioner where tax fraud is suspected.
Each of the audit observation of the officer of Inland Revenue shall be conveyed to the concerned registered person and finalised on examining the viewpoint of such registered person to be furnished within such period as may be specified by the said officer. If no viewpoint is received from a registered person during the specified period, any contravention specified in the audit observation shall be adjudicated. The show-cause notice shall stand abated where a person has before the finalisation of adjudication, deposited the unpaid amount of tax along with default surcharge and penalty due under the Act.
On the issue of special audit, the Board may on such terms and conditions as may be agreed upon with the accountant, appoint an accountant for conducting a special audit, including forensic audit, of records or refund claims of any registered person or class of registered persons whether or not such registered person or class of registered persons has been audited earlier by any officer of inland Revenue, or other department. The accountants shall have powers of an officer of Inland Revenue as may be specified by the Board, VAT Act 2010 added.
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