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What is special audit under GST framework?

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 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

Read ultimate things to Know About GST Audit

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