How auditor comes to know about vat rate of various goods?

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This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2012 Dear experts please solve one of query coming in mind regarding sales tax rate:

1. How a tax auditor confirm rate of VAT
of various items showing in books of
account of the client.

Example:
A Proprietorship trading firm which deals in hardware items shown different rates of VAT on item purchased & sale say 4%, 5%,14%,2%, taxfree.

There are people who are trying to get there accounts audited with tally data only and not giving any sales, purchase bills.

2. There activity seems to suspecious and
look like that they have manipulate the
sales & purchase with diff. rates to
evade the sales tax liability.

3. Also seen some accounts book in which opening stock is NIL & have closing stock. Further no VAT receivable or payable shown in books of A/c's

Please guide what is the possible thing that these type of traders trying to do & wish to get there accounts audited.

Please replied fully & elaborately.

Regards

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

07 April 2012 Who is an auditor. He is an expert of accounts and having full knowledge of various acts, rules and regulations. If any issue on taxes whether it is sales tax or income tax is is suppose to know that law. This enables him to find out what rate on which goods is applicable if he is doing VAT audit.