Advisory to CAs on VAT Audit Report AR1 & Special Audit.
October, 30th 2013
GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI
DEPARTMENT OF TRADE & TAXES
VYAPAR BHAWAN, I.P. ESTATE, NEW DELHI-ll0002
No. t:.:3 Cd 8 It) J fdf,JI v-Pt, J 20J3 J ~~~-~0-6 Dated: r 4- Ix 18
CIRCULAR NQ,.<, of 2013-14
Subject: Advisory to CAs on VAT Audit Report AR1 & Special Audit
The Dep.artment of Trade & Taxes, Government of NCT of Delhi vide notification
dated 11th February, 2013 under Section 49 of the Delhi Value Added Tax Act, 2004 and Rule
42 A of the VAT Rules, 2005 has made the VAT Audit by Chartered Accountants mandatory
for dealers With gross turnover of ~ 10 Crore and above in 2011-12 or in any of the
subsequent financial year. The Department has prescribed a comprehensive VAT Audit
Report AR1 for this purpose. This provision is being implemented for the first time in the
Net of Delhi and is applicable for the financial year ?012-13 and the report has to be
submitted by the dealers on or before 15th November, 2013.
Further, the Department has selected several dealers based on risk profiling through
the departmental system for conducting Special Audit under Section 58A of the OVAl Act.
The Government has reposed faith on the CA community and we are sure if the
Audit/Special audit is faithfullv executed according to the provisions of DVAT Act, Rules,
notifications, advance rulings, determination orders and circulars of the Department, the
same will help in improvlng tax compliance on the part of the dealers and ensure due
revenue to the exchequer. Further, a faithfully drafted AR-l Report and/ or Special Audit
Report, as applicable, would help dealers by pre-empting the need for undertaking
Departmental Audit or Enforcement proceedings.
The Department has high expectation from the CA community and the CAs are
advised to carry out the VAT Audit and Special Audit with strict reference to the relevant
legal provisions, and complete the work timely. The panel for Special Audit will be reviewed
each year based on the quality and the timeliness of the reports. This will ensure that in
future too the Government can continue reliance on CAs for the purpose of VAT Audit and
Special Audit. The findings of VAl Audit / Special Audit would be subject to peer review
and comparison with system based risk profiling of the Department would be undertaken.
Adherence to quality standards by CAs while conducting VAT Audit / Special Audit would
help us avoid any reference to the d,sc.iplinary committee of the lnstltute of Chartered
Accountants of India where the report is found wanting in material particulars or where
there is deliberate suppression of facts.
Dated: (It, ~1rg
COpy forwarded for information and necessary action to:-
~. PSto ProSecretarv Finance, Delhi Secretariat, New Delhi - 110002.
2. PS to the Commissioner, VAT, Department of Trade and Taxes, GNCT of Delhi Vyapar
Bhawan, J.P. Estate, New Delhi -110002.
3. All. Spl./ Addl./Joint comm~ssioner~ Department of Trade and Taxes, GNCT of Delhi
Vyapar Bhawan, LP. Estate; New Delhi - 110002.
4. Dy. Director (Policy), Department of Trade and Taxes, GNCT of Delhi Vyapar Bhawan,
LP. Estate, New Delhi - 110002.
5. AU A.C. (VATs)!AVATOs Department of Trade and Taxes, GNCT of Delhi Vyapar
/hawan, LP. Estate, New Delhi -110002.
~. Programmer (fOP), Department of Trade and Taxes, GNCT of Delhi Vyapar Bhawan,
\ ,.P. Estate, New Delhi -110002.
7. The President/General Secretary, Sales Tax Bar Association (Regd.), Vvapar Bhawan,
l.P, Estate, New Delhi - 110002.
8. The President, The Institute of Chartered Accountant of India, ICAI Bhawan, lnderprastha
Marg, New Delhi- 110002.
9. Guard File.
+ AR..'~AT (Policy)