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March 24, 2021

Manual for quality assurance review and audit performance index of the audit divisions in GST department

by CA Shivam Jaiswal in GST

Manual for quality assurance review and audit performance index of the audit divisions in GST department

Central Board of Indirect Taxes and Customs Department had issued a manual for quality assurance review & audit performance index, 2021.

The system of Quality Assurance Review (QAR) was first introduced in April 2004 to effectively monitor the compliance of EA 2000 methodology by the audit formations at the field level. The Manual for QAR was first introduced in 2007. Subsequently, the same was revised in 2008 and 2016 based on certain amendments in the Central Excise and Service Tax statutes and also after the formation of exclusive Audit Commissionerates during the reorganization of formations in the CBIC in the year 2014.

Presently, quality evaluation of Central Excise and Service Tax audits is done as per the QAR Manual, 2016 by the Zonal units of this Directorate annually.

Pursuant to introduction of Goods and Services Tax (GST), a major tax reform in the country, w.e.f. 01.07.2017, GST Audit Manual, 2019 (GSTAM 2019) was released by this Directorate envisaging the audit process to be followed for conduct of GST audits with certain changes in the norms for selection of taxpayers for conduct of audits, approval of audit plans, conduct of desk-based audits in case of small taxpayers etc.

In view of this sweeping reform, a need has arisen for a comprehensive review of the QAR Manual, 2016 to align it with the guidelines prescribed under GSTAM 2019 and to make it a more transparent and effective tool for performance evaluation with the intended objective of using the evaluation for improving audit efficiency and outcomes.

A committee headed by Shri Sunil Jain, Additional Director General, Hyderabad Zonal Unit constituted for the comprehensive revision of the performance evaluation methodology of Audit Commissionerates has come out with elaborate proposals, which have been approved by the CBIC in its meeting held on 14.10.2020. These proposals are discussed in this manual.

Some of the highlights of the Manual for Quality Assurance Review & Audit Performance Index, 2021 are as under:

  • Methodology for grading the Audit Commissionerates, on both, qualitative performance in the form of QAR and quantitative performance in the form of API, and a composite annual grading is provided in this Manual.
  • The existing system of assessment by way of marking “yes” or “no” against each standard of the audit process is being replaced with a numerical scoring system which will ensure that the evaluation is based on an objective and rational methodology leaving little scope for subjectivity. A new set of parameters are introduced for QAR grading.
  • Scoring based on additional parameters like training needs, timely scheduling of audits, periodical reviews by senior officers etc. to evaluate and improve the general performance of the Audit Commissionerate is also being introduced, in the QAR.

All due care has been taken in drafting this manual. Suggestions from the field formations and other Zonal units also have been suitably incorporated.

I appreciate the personal efforts made by Shri Sunil Jain, Additional Director General, Hyderabad Zonal Unit and his team of officers right from the beginning of making proposals for revamping of the QAR process to bringing out this Manual.

Feedback, inputs and suggestions pertaining to this manual may be provided to the Office of Directorate General of Audit through the jurisdictional Additional Director General (Audit).

Director General

Read below “Manual for Quality Assurance Review & Audit Performance Index 2021


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