How to conduct octroi audit?

Octroi audit is basically conducted to check whether the amt of audit paid by the payer or claimed by the customer/retailer/distributor from the company is correct or not.

Following are the steps to conduct audit effectively and efficently:-

1. Firstly data should be vouched properly to check the compliance or internal control of the company. Following are some basic things which should be checked during vouching:

a. Whether the entry made by the client is correct?

b. Check basic calculation on the face of the voucher.

c. Check the octopi invoice i.e. basic calculation, no. of payment made against single voucher etc.

d. Following things should be checked in Form-B:

a) Receipt No.

b) Random No.

c) Date of Import

d) Name of the party

e) Quantity of the product

f) Description of product with Item No.

g) Advalorem Value, rate and Amount of octroi 

h) How to payment is made to the authority? Presently we have three methods to pay octroi to the Authority:

i. Through cash

ii. Through Demand Draft

iii. Through Cheque

Following things should be kept in kind while checking of payment:

a. In case of cash payment, whether any stamp is prefixed on the challan.

b. In case of Cheque & DD, DD/Cheque Date (as the case may be), Cheque/DD NO. and Bank on which that instrument was drawn.

After performing above steps, Tax Invoice should be checked properly. Following things should be checked:

a. Invoice Date

b. Invoice Number

c. Amount of Invoice

(In case where more than one Invoice on which octroi have been paid through single payment or through Single Challan, ensure that the Qty, Item code, Rate & Amounts have been matched with the Challan)

a. Calculate Amt of octroi as per Advelorem and Amt of octroi as per Invoice Amt, then reconcile both these value and in case of any difference further enquire the same with the management.

b. In case of online recipt is enclosed with the voucher, check the online checking date and HSN no. (which is basically the item code).

How to analyse the punched Data?

There are many methods through which we can analyse the data in the effective and efficient manner. Following are some methods which can be used:

1. Online checking of the receipt through Octroi portal either by using Receipt no. or Random No. and check the following Details:

- Date of Import

- Party Name

- Vehicle No.

- Quantity of the Product

- Advelorem Value & Amt of octroi

- Invoice No. & Invoice Date

2. Compare HSN code with the Item code, in case of any difference between these two values, Further investigate the same by online checking, Genuiness of the Invoice or any other document.

3. Compare the amt of Octopi as per Advelorem Value with the Amt of octroi as per Invoice Amt.

4. Compare the amt of octroi booked in the books of accounts with the amt of octroi as per Advelorem value and as per Invoice amt.

Following are some tips which can be used to conduct audit in effective and efficient manner:

i. Receipt number of two challan can’t be same.

ii. Date of import & Description Of product on challan should not be mismatched with online receipt.

iii. Check the Geuniness of the documents provided by the client.