Analysis on GST Audit

A Brief Analysis on GST Audit


Analysis on GST Audit is necessary for verification purpose. GST Audit is verification of the original records, returns and other documents kept with the taxpayer at the business premises (including all Additional Place of business) and correlating them with the information furnished by the taxpayer on the GST Portal in his/her returns/statements to verify the correctness of reported turnover, exemptions/deductions claimed, rate of tax applied, ITC and Refunds claimed etc

  • The tax officer can examine the documents of taxpayer’s original records either in the office of the Tax Officer or at the business premises of the taxpayer, as communicated to the Taxpayer through Notice in Form ADT-01.
  • The process may lead to the issuance of notices and audit report to the taxpayer, based on the observations and findings by the tax officers.

When GST Audit is required to be conducted?

Any registered taxable person whose annual aggregate turnover exceeds 5 crore INR during a financial year needs to get their accounts audited.


Audit is examination of records, return and other documents.Those records, returns and documents might have been maintained or furnished under GST law or any other law.To verify the correctness of :-

  • Turnover declared
  • Taxes paid
  • Refund claimed
  • Input tax credit availed To assess auditee’s compliance with the provisions of GST Act and Rules.

Types of GST Audit:

  • Mandatory GST Audit (Section 35(5) Audit by professionals)
  • Departmental GST Audit (Section 65 Audit by Tax Authorities)
  • Special Audit (Section 66 Audit by Tax Authorities)

Departmental GST Audit by tax Authorities (u/s 65)

The place of business of registered person or in tax office.The commissioner or any officer authorized(CA/CMA) by him.The registered person shall be informed by way of a notice 15 working days prior to the conduct of audit in FORM GST ADT-01.

The audit by tax authorities shall be completed within a period of 3 months from the date of commencement of the audit, and such period is further extendable for a period of 6 months by commissioner for the reasons to be recorded in writing.

The proper officer shall, within 30 days, inform the registered person, whose records are audit, about

  •  The findings,
  •  His rights and obligations and
  •  The reasons for such findings in FORM GST ADT-02.

CGST Act Sec 66. Special audit

(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner.

(2) The chartered accountant or cost accountant so nominated shall, within the period of ninety days, submit a report of such audit duly signed and certified by him to the said Assistant Commissioner mentioning therein such other particulars as may be specified: Provided that the Assistant Commissioner may, on an application made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, extend the said period by a further period of ninety days.

(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.

(4) The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of a special audit under sub-section (1) which is proposed to be used in any proceedings against him under this Act or the rules made thereunder.

(5) The expenses of the examination and audit of records under sub-section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determination shall be final. (6) Where the special audit conducted under sub-section (1) results in the detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74.

Taxpayer can make payment against the following five notices/reports issued to them by the tax officer

  • Notice for Discrepancy under rule 101(4)
  • Additional Notice for Discrepancy under rule 101(4)
  • Audit Report u/s 65(6) (GST ADT-02)
  • Audit Report u/s 66 (GST ADT-04)
  • Show Cause Notice (DRC-01)



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