How are trading companies' accounts audited in India?

Entities in the trading industry are liable to pay value-added tax (VAT) and central sales tax (CST). VAT audits are performed to verify whether VAT and CST liabilities are being properly determined and paid by the businesses in question.

However, there is no separate audit for CST.VAT departments themselves are responsible for their compliance, and generally carry all necessary details about CST. In India each state has its own VAT system and is responsible for collecting its own taxes; states consequently each have their own VAT legislation governing VAT audit.