42 Audit by specified authority

Audit by specified authority.

42 (1) Audit report referred to in sub-section (17) of section 21 shall be submitted by the dealer referred to in that subsection to his assessing authority in Form XXIII along with the annual return of turnover and tax referred to in sub-section (7) of section 24.

(2) In the report, prepared by the authority referred to in sub-section (17) of section 21, the authority shall mention names of books of account and nature of documents which are produced before him for audit and which were audited by him. He shall give a precise note about the manner in which the same have been maintained.

(3) The specified authority, who has made audit, shall audit the accounts and documents with a view to ascertain the claim of input tax credit and reduction in the input tax credit on account of reverse input tax credit.

(4) The specified authority shall, in its audit report, indicate whether or not the dealer has computed amount of reverse input tax credit in accordance with provisions of the Ordinance and these rules and Inventories prepared are in accordance with provisions of these rules.

"Explanation: For the purposes of this rule, gross turnover of purchase or sale or both as the case may be, shall mean the aggregate of,–

(a) turnover of purchase of goods liable to tax under section 5 ;

(b) turnover of sale of goods other than goods covered under clause (a) above, where such sale is,-

(iii) in the course of the export of the goods out of the territory of India; or

(iv) in the course of import of goods into the territory of India;