Section 65 of the CGST Act empowers the commissioner to undertake audit of any registered person by issuing a notice in Form GST ADT-01 to such registered person.  The notice shall be issued within 15 working days prior to the conduct of audit.

The commissioner can also authorise any officer to conduct the audit.

The audit can be conducted at the place of business of the registered person or in their office.

The audit shall be completed within a period of three months from the date of commencement of the audit.

Where the audit cannot be completed within three months, the commissioner can extend the period of audit by a further period not exceeding six months, stating the reasons, to be recorded in writing.

The date of commencement of audit shall be the date on which the records and other documents as required by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later.

As per the Rule 101 (1) of CGST Rules, the audit can be conducted for a whole financial year or a part of a financial year or multiples of financial years.

During the audit, the officer can ask for necessary facility from the registered person to verify the books of accounts or other documents and other such information as required to complete the audit.

The scope of the audit includes the verification of the books maintained, returns and statements furnished, correctness of the turnover, exemptions and deductions claimed, the rate of tax applied for the supplies, input tax credit availed and utilised, refund claimed, etc.

The officer after completing the audit, shall inform the registered person about the findings, his rights and obligations and the reasons for such findings within 30 days from the date of conclusion of the audit in Form GST ADT-02.

Before finalizing the audit report, the officer may inform the registered person about the discrepancies and after his reply to such discrepancies, the officer may finalise the audit report after considering the reply furnished by the registered person.

The officer can initiate action under section 73 or 74 if he detects of any tax not paid or short paid or erroneously refunded or input credit wrongly availed and utilised.

For any assistance in GST, contact:

Disclaimer: This article is only for the purpose of understanding the provisions of the Act, The author bears no responsibility on decisions taken by the readers whatsoever.  E&OE.

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February 2024