The audit department of the Central Board of Indirect Taxes and Customs (CBIC) has developed risk parameters for selecting taxpayers to be audited on the basis of annual returns. However, the department has instructed officials to move to desk-based filing for small taxpayers, instead of the traditional method of premise-based audits. In a detailed letter on how to conduct audits, the department said premise-based audit still has to be conducted for medium and large category of taxpayers. Further, such audits should be undertaken in a time-bound manner to ensure completion within the stipulated time period of three months from the commencement of audit, it said. Pratik Jain, partner and leader – indirect tax, PwC India, said: “Such guidelines have been issued for GST audits for the first time. One will have to see whether state governments would come out with similar guidelines for conducting audits of taxpayers under their (SGST) administration. Assigning of risk scores to various dealers for selection of audit is needed for the authorities to focus on cases where possibility of tax leakage is more.”