This article explains the audit process for Sindh Revenue Board (SRB).

Who Can Conduct Audits?

• An authorized officer of the Sindh Revenue Board (SRB), with a minimum rank of Assistant Auditor SRB, can conduct audits.

Audit Frequency:

• Generally, audits occur once a year for registered persons (businesses liable to pay SST).

Reasons for Additional Audits:

• The Commissioner SRB may order additional inquiries or investigations if they suspect tax fraud or evasion.

Audit Procedure:

1. Notice of Audit: The SRB issues a notice informing the business of the audit and requesting relevant records.
2. Preliminary Audit: The officer reviews submitted records and identifies potential tax violations or evaded amounts.
3. Audit Observation: The officer issues a report outlining any discrepancies and the estimated evaded tax.
4. Registered Person’s Response: The business has 21 days to respond to the audit observation with their explanation.
5. Audit Report:
   
   • If no response is received, or the response is unsatisfactory, the officer issues a final audit report.
   • This report specifies the amount of tax owed, default surcharges, and any penalties.
6. Order by SRB Officer: Based on the audit findings, an order is issued:
   
   • Assessing the tax amount owed (Section 23)
   • Determining penalties for non-compliance (Section 47)

Voluntary Tax Payment Options:

• Businesses can avoid penalties by voluntarily depositing:
  
  • Short-paid tax
  • Evaded tax
  • Default surcharge
• This can be done:
  
  • Before receiving the audit notice (filing a revised return)
  • During the audit process (filing a revised return)
  • Before receiving a show cause notice (filing a revised return)

Penalty Reductions for Voluntary Payment:

• Full voluntary payment before audit notice avoids penalties.
• Voluntary payment during the audit or before a show cause notice reduces the penalty to 20%.

Conclusion:

Understanding the SST audit process can help businesses ensure compliance and avoid penalties. It’s recommended to consult us for specific guidance.