GST is a trust based taxation regime wherein the taxpayer is himself required to self assess his tax liability and himself pay the same without any intervention by the tax officials. To ensure that there are no mis-appropriations in the self-assessed GST Returns, the govt has put in a place a robust audit mechanism to measure and ensure compliance of the provisions of the GST law by the taxpayer.

When is GST Audit required to be conducted?

GST Audit is required under the following 3 circumstances

  1. Audit by CA if Turnover exceeds Rs. 2 Crores
  2. Normal Audit by the Commissioner
  3. Special Audit by CA

If Turnover exceeds Rs. 2 Crores

If the turnover exceeds Rs. 2 Crores during the financial year, the taxpayer is required to get his books audited by a Chartered Accountant or a Cost Accountant and furnish a copy of the audited annual accounts and a reconciliation statement, duly certified, in Form GSTR 9C on or before 31st December.

The Format for GSTR 9C has been released and can be downloaded in PDF and Excel Format from the following links:-

  • Download Form GSTR 9C in PDF Format
  • Download Form GSTR 9C in Excel Format

Normal Audit by the Commissioner

The CGST/SGST Commissioner or any officer authorised by him can undertake audit of any registered person at such frequency and in such manner as may be prescribed.

The Audit can be carried out either in the premises of the registered person or may also be done at the office of the proper officer, by calling for information or documents. However, a 15 days clear notice in GST ADT 01 would be required to be provided to the person before the initiation of such an audit.

The audit proceedings have to be closed within 3 months from the date of commencement of audit. The date of commencement of audit shall be the date on which all documents and information called for are provided or audit initiated at the business premises, whichever is later.

If the commissioner is satisfied that the audit cannot be completed within 3 months, he can accord the reasons in writing and extend the time for a further period of maximum 6 months.

During the course of the audit, the authorised officer may require the registered person,

  1. To afford him the necessary facility to verify the books of account or other documents which he may require,
  2. To furnish such information as he may require and render assistance for timely completion of audit.

On conclusion of the audit, the proper officer shall, within 30 days, inform the registered person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings.

On completion of the GST Audit, information is required to be provided to the registered person including the findings during the audit in Form GST ADT 02 within 30 days from the conclusion of audit.

Once, the above are done – the officer may determine the tax payable and interest and penalty, it any, thereon, and also the initiation collection proceedings.

Special Audit in GST

The taxpayer can be directed by the department to get his records including the books of accounts examined and audited by a chartered accountant during any stage of scrutiny, inquiry, investigation, or any other proceedings; depending on the complexity of the case.

Special Audit provides a lawful and legal way for the GST Officers to take the assistance of professional expertise of a chartered accountant or cost accountant to determine the tax liabilities in complex cases.

During the scrutiny, inquiry, investigation or any other proceedings of a registered person, the Assistant Commissioner or any other officer senior to him, having regard to the nature and complexity of the case and the interest of revenue, might be of the opinion that the value has not been correctly declared or the credit availed is not within normal limits.

In such cases, with the prior approval of the Commissioner, the Assistant Commissioner or any officer senior to him can direct the registered person in form GST ADT-03 to get his records including books of accounts examined and audited by a chartered accountant or a cost accountant. The Chartered Accountant of the Cost Accountant would be nominated by the Commissioner.

The Chartered Accountant or the Cost Accountant so nominated has to submit a report of such audit within 90 days in form GST ADT 04, duly signed and certified by him to the Assistant Commissioner. On an application made by the registered person or the chartered accountant or the cost accountant or for any material and sufficient reason, the assistant commissioner can extend such period by a further period of 90 days.

The provisions of special audit shall have effect even if the accounts of the registered person have been audited under any other provisions of the GST Act or any other law for the time being in force.

The registered person shall be given an opportunity of being heard in respect of any material evidence gathered on the basis of the special audit and which is proposed to be used in any proceedings against him under the GST Act or the rules made thereunder.

The expenses of the examination and audit of records, including the remuneration of such chartered accountant or cost accountant shall be determined and paid by the Commissioner.

On conclusion of the special audit, the registered person shall be informed of the findings of the special audit in form GST ADT – 04.

Where the special audit results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the process of demand and recovery will be initiated against the registered person.

The format for GST Audit forms i.e ADT 01, ADT 02, ADT 03 & ADT 04 have been given here – GST Audit Forms