Indirect taxes in India are very complex and subject to frequent amendments. This requires companies to undertake periodical mapping of their tax system to examine instances of non compliance and potential problems or opportunities.

Expert team at H&A can review your indirect tax system and documentation, and identify opportunities for better tax management, as well as potential areas of contention. The objective of reviews is to give management comfort of having fully complied with law and simultaneously no tax incentives or benefits are missed. Our review methodology is aimed at “prevention is better than cure”. The services are provided in all indirect tax laws i.e. excise, service tax, VAT, FTP, Customs etc.

The review services comprise of following:

  • examining applicability of indirect taxes
  • examining eligibility of tax credits and export benefits (as applicable)
  • reviewing statutory returns/ records and documentation
  • evaluating tax optimization opportunities
  • identifying tax exposures and inefficiencies
  • detailed exception report outlining observations

Nature of reviews undertaken are as follows:

Limited Review

This covers longer period say 3 to 5 years to evaluate extent of compliance of laws and areas of value addition. We highlight non compliance in high, medium and low risk categories inviting direct attention of top management on the areas requiring immediate actions. The review also brings out opportunities of better tax planning. With our experience in almost all industries, we are able to suggest best business practices in tax management.

Follow up Review

This is routine follow up review of the entity’s operations. There could be possibility of gaps in the understanding of personnel handling tax matters, or frequent turnover of employees or frequent amendments in the law requiring independent review of tax compliance. The review will pinpoint potential problems before they become real financial difficulties. This could be quarterly, six monthly or annually.

Due Diligence Review

In business restructuring deals, tax due diligence of buyer side is required. This may required to be done voluntarily by buyer or based on specific direction by seller. The review is intended to highlight the tax exposure which may carry to new entity. This becomes more critical in cases where entity is exposed to multiple indirect tax laws. We have tax experts having in-depth knowledge in due diligence review to support the parties to deal or other professional advisors. The team identifies areas of non compliance, potential threats thereof and suggest remedial measures. Based on review, we are able to suggest alternative structuring strategy to optimise tax incidence.

Review Before Departmental Audit

Departmental audit is undertaken to gauge revenue leakage. This may ultimately culminate into litigation proceeding against the assessees. The cost of such unearthing is very high especially due to higher rate of interest and imposition of penalty upto 100%. With our experience, we know the possible target areas of department and methodology adopted for audit. We carry out the review before department officers come to your office and highlight areas which need immediate actions to minimise/avoid the risk of possible future litigation.

Compliance Review to Support Auditors

In recent years, reporting obligations of statutory, tax and internal auditor have increased manifold. They are required to mention the extent of non compliance under indirect taxation also. We support chartered accountants and other professionals in undertaking compliance review during the course of their statutory, tax and internal audit so that they are able to meet their statutory obligations. This sometimes, also opens up huge tax planning opportunities for the client.