PPT

1. SSCA on
Department’s Oversight
of GST Payments and
Return Filing
(SSCA on D0RF)
Principal Accountant General, Audit-I,
Karnataka, Bengaluru
AMG-III
27 June 2022

2. Overview of the SSCA
(PDAC)
Data driven audit
To be carried out by State Audit Offices and CRA Offices
Implementation through OIOS toolkits
Outcome of the SSCA- Three distinct parts
High Risk returns - Limited audit
High Risk Units - Detailed Audit of Taxpayers
Functions of Ranges/ field formations of SGST offices

3. Audit Objectives
(PDAC)
Whether the rules and procedures are designed to
secure an effective check on tax compliance and are
being duly observed by taxpayers
Whether the scrutiny procedures, internal audit and
other compliance functions of the Range/Departmental
field formation are adequate and effective

4. Three Distinct Parts of the SSCA
(PDAC)
Description Detailed Audit Limited
audit
Audit of Range/Departmental Field
Formations
Allocation of
Manpower for
conduct of
audit
70% 20% Part of 70%
Coverage and
distinction
All domains of GST
returns of taxpayers
One aspect
of GST
returns of
taxpayers
-Scrutiny Function
-Action on late and non filers
-Cancellation and action of registration
-Analytical reports follow up (if any)
Sampling unit Taxpayers -Weightage
(Set I) 80%
Taxpayers – Turnover
(Set II) 20%
Taxpayers Ranges having jurisdiction over Taxpayers
selected for Detailed Audit

5. Three Distinct Parts of the SSCA
Descripti
on
Detailed Audit Limited audit Audit of
Range/Departmental
Field Formations
Sample
selection
-Stratified on Financial materiality:
Large, Medium & Small
-Weightage of risk parameters
-Risk scoring of Taxpayers
-80% selection: risk based
-20% selection: statistically random
Data queries –
detecting deviations
12 high risk aspects
identified
Derived from sample
for detailed audit
(25%)
Sample
size
Karnataka -100 Karnataka - 473 Karnataka – 21

6. Three Distinct Parts of the SSCA
(PDAC)
Description Detailed Audit Limited audit Audit of
Range/Departmental
Field Formations
Process -Desk review
-Verify departmental
and taxpayer records
-OIOS toolkit
-Limited desk review
-Intimate Ranges
-Verify departmental and
taxpayers records
-OIOS toolkit
-Examination of
records at Ranges
-OIOS toolkit
ADMs Toolkits in OIOS Toolkits in OIOS Toolkits in OIOS

7. Limited Audit
First Part of the SSCA

8. Limited Audit-12 Checks
• ssues in bullets (in Arial 12 font)
(PDAC)
Area Risk Data Query to extract Sample
1. ITC Excess ITC availed GSTR 3B Table 4A(5) > GSTR 2A Table 3
with adjustments from GSTR 9
2. ITC on RCM Excess availment GSTR 3B Table 4 < GSTR 9 (Table 6C 6D
and 6F)
3. ITC on RCM Availed without
payment
GSTR 9 Table 4G < Table 6 (6C 6D and 6F)
4. ISD credit
distribution
Irregular availment by
recipients
GSTR 9 Table 6G of recipients and R3B of
Recipients > GSTR 6 of ISD

9. Limited Audit- 12 Checks
• ssues in bullets (in Arial 12 font)
Area Risk Data Query to extract Sample
5. ISD reversal Short or no reversal GSTR 9 (Table 7B) of recipients <
GSTR 6 of ISD
6. ITC Unreconciled ITC w.r.t
Financial Statements
GSTR 9C Table 14 T and 12 F
7. Tax Value Short declaration w.r.t
Financial statements
GSTR 9C Table 5R, 7G, 9R
8. Taxable Liability Undischarged tax liability Tax payable in GSTR 1 or GSTR 9 >
Tax paid shown in GSTR 9

10. Limited Audit- 12 Checks
Area Risk Data Query to extract Sample
9. Composition levy eCommerce suppliers availing
composition levy
Assesses in GSTR 8 Table 3 vs
Assesses in GSTR 4
10. Return filing Non filing of 3B – Non-
payment of tax but passing ITC
GSTR 3B not filed but GSTR I or
2A available
11. Interest payment Short payment of interest GSTR 3B (Table 6.1) – 18% on
Cash component > interest paid
12. Stop filers Cancellation of registration Not filed for six consecutive
months

11. Limited audit
One check for each of the
12 aspects taken up for
Limited audit
Sample GSTN and
deviation value auto
populated (Toolkit linked
to sample dataset)
Data capture restricted to
action, if any, taken by the
Department prior to our
observation and follow up
action on our observation

12. Detailed Audit
Second Part of the
SSCA

13. Detailed Audit: 3 Domains (To check various aspects of a Taxpayer’s returns)
(PDAC)
• Total 28 Questions to answer (ADM)
• Returns 5
• UDL 15
• ITC 8
• 3 different Toolkits for each domain in OIOS to capture the results alongwith a
separate toolkit for desk review.
Returns
Undischarged
Liability
Input Tax
Credit

14. Desk Review (for Detailed Audit)
• Objectives
• To identify potential areas for a focused substantive audit
• To qualitatively assess the field audit party’s work & performance
• Number of checks: 40 - includes data checks, ratio analysis
• Source for checks: Data from GSTN, Returns and Financial statements
• Intrinsic part of audit process: Table wise return related data in GSTN for each
sample case provided
• Response: No risk/ Audit requisition / Audit Query / Audit Observation/Not
Applicable
• Only red-flagged cases in Desk Review to be attempted in Detailed Audit.
• Prior approval of Group Officer before commencing Detailed audit.
• One separate toolkit to capture the results of Desk Review.

15. Range Audit
Third Part of the
SSCA

16. Audit Design Matrix- Range functions
Review of the following aspects of Range functions
• Scrutiny
• Action on late-filers and non-filers
• Cancellation of registration
• Compliance to Analytical Report (if any)
Responses to be provided in OIOS toolkit

17. Timelines
(PDAC)
Karnataka State Office
•Commencement –
•Field visits -
•Review chaired by DAI/CRA- July 2022 (?)
•Draft to Hqrs by Lead Office –

18. Status of Work

19. Headway
Total Sample Intimation sent/
Communication
sent
In
progress
Completed Records/
Confirmation
received
Desk Review 100
Detailed audit 100
Range Audit 21
Limited Audit 473

20. Limited Audit
• Number of Queries (AQs) issued : 255 (Deviations – 346)
• Number of cases where responses were received : 39
• Number of cases examined : 0
• Number of replies under examination : 20
• Number of replies interim in nature : 19
• Number of cases where responses accepted : 0
• Number of cases converted into AO : 0
• 1st Reminder has already been issued by the audit parties.
• 2nd Reminder will be issued shortly.

21. Deviations Responses
Received
Responses
checked
Addl. Details
Called for
Responses
Accepted
Obs. Error
rate
ITC Mismatch
RCM Excess ITC Avail
RCM Short payment
ISD
ISD Reversal
12F – Excess ITC
14T –Ineligible ITC
5R – Total Turnover
7G – Taxable Turnover
9R – Tax paid
Undischarged Liability
E-commerce
3B not filed but R1 available
Interest short paid
Stop Filers
Total

22. Detailed Audit
• Number of Queries (AQs) issued : (Deviations – )
• Number of cases where responses were received :
• Number of cases examined :
• Number of cases dropped after examination :
• Number of cases converted into AO :

23. (PDAC)
Steps to be followed during Desk Review
• Issue intimation letters asking for the financial with all the
schedules
• Complete the desk review with the help of financials the
returns and the consol data
• Find out the areas not to be covered during the actual
field audit
• Get approval from Group officers based on the desk
review.

24. (PDAC)
Steps to be followed during Detailed Audit
• Visit the Department and issue the AQ based on the Desk Review.
• Also, issue the AR for the additional records on the red-flagged cases alongwith the
selection of month.
• Prepare work allocation for each party members
• After finishing the audit issue AO to the department through OIOS.
• Collect KDs for the AOs and link with the AO.
• Prepare Positive AO for those ADMs not converted into AOs.
• This Positive AO need not be issued to the department but saved in OIOS.
• Collect the KDs for the AOs preferably soft copies.
• Collect KDs for the Positive AOs and should be linked to the AO.
• Complete the detailed audit Toolkit in OIOS.
• Complete the ADM toolkit in OIOS.

25. Range Audit
• Number of Ranges selected : 21
• The work has been allocated between the audit parties
• Intimation will be sent to Range Offices by each audit
party.

26. (PDAC)
Constraints faced during Limited Audit
•The AQs has been issued to all the respective
offices. However, response of the department is
very poor. 1st reminder has already been issued.
2nd Reminders will be issued shortly.
• The 2nd inter-departmental meeting was very
much fruitful as responses are coming from the
department.

27. (PDAC)
Constraints faced during Detailed Audit
• To match with the latest audit approach as to be followed uniformly
throughout India.
• Access to taxpayer’s records e.g. Detailed financials alongwith the
underlying documents. However, situation has improved after the second
inter-departmental meeting with the Divisional Officers on 9th June 2022.
• The sample size is high, keeping in mind the latest changes in the Audit
Process as communicated by Lead Office.
• The 18 units replaced from the buffer list has not yet been mapped in
OIOS.
• In few cases the jurisdiction of the taxpayers are being changed in a very
random manner.

28. (PDAC)
Constraints faced during Range Audit
• The Range officers have conveyed that this much detailed
information are not maintained in their offices. Also, they
conveyed that they are overburdened with their regular work.
• However, we have not yet received any written communication
regarding this. We can request them to reply as soon as possible
so that we can bring this to the notice of the lead team. Also, this
will be an KD for our Audit Observation.
• For the manpower issue per se, we can capture the Men-in-
position in each selected offices as advised by the lead office and
comment suitably.

29. Thank You