Audit provisions are covered under Section 65 and 66 of the CGST Act, 2017 respectively. There are two types of audits which have been prescribed under the said Act. The same are as follows:

Audit under GST Laws

1. Section 65 – Audit by Tax authorities

S.No. Particulars Details
1 Period of audit Audit may be undertaken for a financial year or parts thereof by the Commissioner or officer authorized by him
2 Place where audit can be conducted only at the place of business or the office of the registered person
3 Intimation of audit Intimation of audit through notice issued in FORM GST ADT – 01 – should be issued not less than 15 days prior to the conduct of audit
4 Completion of audit within 3 months from the date of commencement of audit

Commissioner may extend such period by further period not exceeding 6 months

Date of commencement of audit – Later of the date when the records asked by officer is provided by the registered person or actual institution of audit at the place of business

5 What to audit
  • Books of account and basis on which it has been maintained
  • Returns and statements furnished under GST Act
  • Correctness of

– turnover, exemptions and deductions claimed

– Rate of tax applied on outward supplies

– Input tax credit utilized

– Refund claimed

– Other relevant issues

6 Conclusion of Audit The registered person shall be provided with the findings of audit in FORM GST ADT-02 within 30 days of such conclusion of audit

2. Section 66 – Special Audit 

S.No. Particulars Details
1 When applicable During any proceedings, if officer (Asst. Commissioner and above), believes that

–  Value has not been correctly availed, or

–  Input tax credit is not availed within normal limits

And considering the nature and complexity of the case and the interest of revenue, may order for special audit

2 Who can conduct special audit – Chartered Accountant

–  Cost Accountant

As nominated by the tax officer (‘Nominated auditor’)

3 Intimation of audit Direction in FORM GST ADT-03 to the registered person to get his books examined and audited by the nominated auditor
4 Completion of audit – within 90 days from the date when the auditor is nominated

– Nominated auditor to submit duly signed and certified audit report

The above said period can be extended by a further period of 90 days on application made either by registered person or nominated auditor

5 Conclusion of Audit The registered person shall be informed of the findings of the special audit in FORM GST ADT-04
6 Expenses of the special audit Remuneration of the nominated auditor to be determined and paid by the Commissioner

 In both the above audits, where findings of the audit results in detection of

  • Tax not paid or short paid
  • Erroneously refunded
  • Input tax credit wrongly availed or utilized

Proceedings under Section 73 or 74 can be initiated by the tax officer

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Location: Gurugram, Haryana, IN
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I am an Associate Member of the Institute of Chartered Accountants of India and have more than 3 years of professional experience in Indirect taxes related work. View Full Profile

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March 2021