internal audit

Dear Friend,

In case of Audit of a cab facility providing concern u need to make sure certain points such as :

1)   Service Tax applicability

2)   Tds deduction must be at a rate applicable to contractor ie.u/s 194C

3)   Check whether the concern is coverd under presumtive Income cases

4)   For Service Tax applicability the limit is Rs. 8 Lac and above

5)  Check for other services rendered and hired and the payments are made only after deduction of TDS (if applicable)  

6)  And make sure that service tax is leived on services rendered and not incase of reimbursements

According to me these general points which one has to kepp in mind while conducting audit

Rest timely interaction would solve ur query

Thanx Bye

Also see if they have enough identity checks of their drivers. Police has advsided all cab operators to ensure the same. And in the light on many incidents of rape, murders etc, it is a must to do so.

The areas covered above are exhaustive.

Also consider the folllowing:

1) Ownership of the Cabs:

(a) as to whether they are owned by the company then verify the registration papers and its insurance

(b) if the cabs are on hire basis, then the agrrement is valid as far as the period covered under audit. the payment is in terms with the agreement.

(c) if there are buses then the TDS needs to done u/s 194 I (rent), as there has been an amendment in 2008 which includes motor vehicles under the defination of plant and machinery. hence deduction would be required only if the payment exceeds Rs.1,20,000.

(d) for owned vehicles, need to verify whether the plying of cabs is part of bussiness objects of the company because only in such case it can avail the benefit of presumptive taxation, else not.

Dear Rajeeb,

Along with the TDS part you can do analysis of payment made to Cab Contractor and quotes called for the same. This will help to analysis that proper steps has been taken or not before hiring any cab agency to reduce cost and quality service.

You can do the analysis of Cab charges along with employee strength for selected period for the feasiability of the required no. of cab vis a vis actual used