Leave GSTN’s internal working to its board, audit
Should the Comptroller and Auditor General audit the Goods and Services Tax Network (GSTN), which is the nodal body to which indirect tax payments (other than Customs duty) by all producers and suppliers of goods and services will file their tax payments, once GST kicks in, and will reconcile input tax credit claims with tax receipts? The government holds only a minority stake of 49% in GSTN, but the company would process more than half the nation’s tax receipts. GSTN opposes the idea of a CAG audit, but the CAG and some other parts of the government feel otherwise. The solution to this budding controversy is fairly straightforward: GSTN’s own finances should be audited like a private company’s while the CAG must audit the tax collection work.
The whole point of setting up GSTN as a private company was to make it fleet of foot and efficient, with the operational freedom to keep functional an information network to which billions of tax payment receipts and input tax credit claims would be uploaded and which must process these filings at top speed to find reconciliation or spot tax liability. To build multiple rounds of redundancy,
and maintain and upgrade its server capacity and speed, GSTN needs to be free from the time-consuming and suboptimal rules and procedures of government procurement and recruitment. As the principal shareholder, the government has the opportunity to appoint the kind of directors to the GSTN board who would ensure good corporate governance and expenditure control, aided by the normal audit process. There is no reason for the CAG to audit the internal working of GSTN and raise objections that might be procedural rather than substantive in nature but could still serve to raise needless controversy over GSTN’s functional integrity.
But when it comes to the work done by GSTN, there is every reason for the CAG to be involved. In fact, the scrutiny and audit of tax filings of a sample from the total filings is an integral part of the GST process, meaning that this part of GSTN’s work is open to scrutiny by revenue officials, in any case.
12TH APRIL, 2017,THE ECONOMIC TIMES,NEW-DELHI
Should the Comptroller and Auditor General audit the Goods and Services Tax Network (GSTN), which is the nodal body to which indirect tax payments (other than Customs duty) by all producers and suppliers of goods and services will file their tax payments, once GST kicks in, and will reconcile input tax credit claims with tax receipts? The government holds only a minority stake of 49% in GSTN, but the company would process more than half the nation’s tax receipts. GSTN opposes the idea of a CAG audit, but the CAG and some other parts of the government feel otherwise. The solution to this budding controversy is fairly straightforward: GSTN’s own finances should be audited like a private company’s while the CAG must audit the tax collection work.
The whole point of setting up GSTN as a private company was to make it fleet of foot and efficient, with the operational freedom to keep functional an information network to which billions of tax payment receipts and input tax credit claims would be uploaded and which must process these filings at top speed to find reconciliation or spot tax liability. To build multiple rounds of redundancy,
and maintain and upgrade its server capacity and speed, GSTN needs to be free from the time-consuming and suboptimal rules and procedures of government procurement and recruitment. As the principal shareholder, the government has the opportunity to appoint the kind of directors to the GSTN board who would ensure good corporate governance and expenditure control, aided by the normal audit process. There is no reason for the CAG to audit the internal working of GSTN and raise objections that might be procedural rather than substantive in nature but could still serve to raise needless controversy over GSTN’s functional integrity.
But when it comes to the work done by GSTN, there is every reason for the CAG to be involved. In fact, the scrutiny and audit of tax filings of a sample from the total filings is an integral part of the GST process, meaning that this part of GSTN’s work is open to scrutiny by revenue officials, in any case.
12TH APRIL, 2017,THE ECONOMIC TIMES,NEW-DELHI
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