The meaning of “Audit” is given U/s 2(13) of the CGST Act, 2017. GST Audit includes:
- Examination of records (Books and accounts);
- GST Returns maintenance and;
- Any other documents maintained by the taxable person under the Acts.
A Special Audit under GST can be initiated by the Assistant Commissioner of CGST/SGST, considering the nature and complexity involved in the case and interest of revenue. During any stage of scrutiny/ inquiry/investigation, if the assistant commissioner is of the opinion that the value of the taxable supplies declared by the registered person is incorrect or the input tax credit has been wrongly availed then special audit can be initiated.
The officer will give his direction in Form GST ADT-03 to the taxable person in this regard. The CA (Chartered Accountant) or a (Cost & Management Accountant) nominated by the Commissioner shall submit a report within 90 days duly signed and certified by him to the said Assistant Commissioner. A special audit can be initiated against the registered person even if the accounts of the taxable person have been audited under any other provisions of the GST Act or under any other law. Once the special audit is concluded, the taxable person shall be informed by the department about the findings of the special audit in FORM GST ADT-04.
GST Audit requires the verification of the certain things mentioned below
- The correctness of turnover declared;
- Refund claimed and;
- Taxes paid;
- Input Tax Credit (ITC) availed and utilised.
Who will order and conduct a special audit?
The Assistant Commissioner of the CGST/SGST (with the prior permission of the Commissioner) can pass an order for special audit. The special audit will be undertaken by a qualified CA (Chartered Accountant) or a (Cost & Management Accountant) nominated by the Commissioner.
Time limit for Special Audit under GST
The auditor appointed for conducting the special audit shall submit the report within 90 days. However, this period can be extended by the proper officer by a further period not exceeding 90 days on an application made by the registered person or the auditor.
Cost of Special Audit under GST
The remuneration of the auditor (conducting the special audit) and the allied cost of the special audit will be determined and paid by the Commissioner.
Difference Between Audits under Section 65 and Section 66
| COMPONENTS | SECTION 65 | SECTION 66 |
| Nature of Audit | It is a departmental audit | It is a Special Audit |
| Conducted by | Audit under this section is conducted by officers of the department authorised by the commissioner | In this section, the audit is undertaken by a CA (Chartered accountant) or a CMA (Cost & Management Accountant) nominated by the commissioner |
| Prior Notice | 15 days notice is required | No such requirement of notice/intimation under Special Audit |
| Time for conclusion of the audit | Audit under this section is to be concluded within 3 months, further extension of a period of 6 months is allowed | The Special Audit is to be conclude within 90 days, further extension of 90 days is allowed |
| Audit Findings/Report | Audit reports should be submitted upon completion of the audit | Audit reports is to be submitted to the assistant commissioner |
| The opportunity of being heard | There is no such specific provision | Yes, where any material gathered during the Special Audit that can be used in any proceedings against the auditee |
| Action based on a report | Yes, under section 73 by the issuance of Show Cause Notice | Yes, under section 73 by the issuance of Show Cause Notice |
Author Bio
• If at any stage of scrutiny, enquiry, 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 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 taxable 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.
• An Assistant commissioner based on the nature and
complexity of business and is of the opinion that
— Value has not been correctly declared; or ,
— Credit availed is not within the normal limits.,
after commencement and before completion of any
scrutiny, enquiry, investigation or any other proceedings
under the Act, may direct a registered person to get his
books of accounts audited by an expert. Such direction is
to be issued in FORM GST ADT-03
• The Assistant Commissioner needs to obtain prior
permission of the Commissioner to issue such direction to
the taxable person
• Identifying the expert is not left to the registered person
whose audit is to be conducted but the expert is to be
nominated by the Commissioner.
•
Very informative. Thanks.