FBR Introduces New Procedure of Electronic Audit

The Federal Board of Revenue (FBR) has introduced a new concept of “Electronic-Audit” for conducting audit of sales tax registered persons without physical interaction between tax officials and taxpayers.

The FBR has amended Sales Tax Rules, 2006 to issue a detailed procedure for E-Audit here on Wednesday.

The E-Audit system has been introduced to conduct sales tax audit of registered persons without any physical interaction between the audit officers and taxpayers during Covid-19 situation.

As per the new procedure, where a case has been selected under section 25 or section 72B of the Sales Tax Act, as the case may be, and the competent authority issues directions to conduct e-audit, the laid down procedure shall be adopted.

The concerned Commissioner Inland Revenue shall serve a notice to the registered person specifying the reasons for selection of his case for audit. The Commissioner Inland Revenue having jurisdiction shall assign the case to an Audit Officer to conduct an e-audit. The registered person shall produce the record as required to be maintained under section 22 of the Act through IRIS or an electronic data carrier as notified by the Board.

A registered person shall not be required to appear either personally or through an authorized representative in connection with any proceedings under e-audit before the Audit Officer:

Provided that a registered person may request for an opportunity of personal hearing through IRIS and such hearings shall be conducted, exclusively through video links from a personal computer system or any of the nearest Tax Facilitation Centre situated at the premises of field formations.

FBR further stated that the Audit Officer after considering all the information, documents, or evidence, if the Audit Officer finds no discrepancy and has no conclusive proof against a registered person, he may close the audit in IRIS under intimation to the Commissioner Inland Revenue having jurisdiction.

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