Hi,
We are from Karnataka and have been called for the sales tax audit for year 2005-06 by the Commercial taxes deparment. I had the following questions:
1) 2005-06 was when we were new in the business and didn't have much knowledge. Our consultant who did the VAT-100/115 retruns has made a complete mess for this year and the figures do not tally whatsoever with the actual export sales made. All sales made in this year were direct exports and we have all the documents like shipping bills, FIRCs etc to substantiate that we have made direct exports. I was confident that exports are exempt from tax and hence there would be no problems. However, I was unofficially informed that since the returns filed were completely wrong and not matching, they were proposing to consider the entire turnover (although exports) as sales and pass order to pay tax on the entire turnover. I was thinking that there would be only a penalty for wrong filing and I was shocked to hear this. Can you please tell me if it is indeed possible to pass such an order and what are my options here?
2) What is the time limit for calling for an audit? Can they scrutinize files as old as from 2005-06?
Look forward to your help on this matter!
CAclubindia
