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CBEC has authorised CAs & CWAs(nominated u/s 72A) to conduct service tax audits at behest of service tax department.

Statutory provisions--

Rule 5A(2) of Service Tax Rules, 1994 authorises department to conduct audit by CAG or any audit party deputed by Commissioner & the assessee was bound to produce the specified documents within 15 days from date of demand( of the prescribed documents) the said auditor.

Legal History:

Various judicial pronouncements have been made recently in the context of service tax audits. Reliance in this regard may be placed on :

ACL Education Centre Pvt. Ltd. & Ors. Vs. Union of India [2014-TIOL-120-HC-ALL-ST] - Hon'ble Allahabad High Court held that audit under service tax is to be conducted by Chartered Accountants/ Cost Accountants only and not by officers of the Department 

SKP Securities Ltd. Vs. DD (RA-IDT) & Ors. [2013-TIOL-38-HC-KOL-ST] - Hon'ble Kolkata High Court held that audit of private assessee can't be undertaken by CAG 

Travelite (India) Vs. Union of India & Ors.- Hon'ble Delhi High Court
held that rule 5A(2) is bad in law.


Now vide N/N 23/2014- ST, rule 5A(2) has been amended and the pronouncement of Allahabad High Court has been followed principaly & CAs/CWAs have been made empowered to conduct service tax audits.

Furthermore, earlier limit of 15 days for production of specified documents has now been replaced with the time limit specified by the concerned audit party/CAG/CAs/CWAs, as the case may be.

The said notification may be accessed from the following link herein below :


This amendment shall bring an emerging opportunity for CAs & CWAs in practise. However, possibility of covering more assesses at a large also arises simultaneously. 


Published by

Sumit Grover
(Chartered Accountant )
Category Service Tax   Report

1 Likes   42 Shares   12006 Views


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