OneCallTax

GST Audit

  • Lorem ipsum dolor sit amet, consectetur adipiscing elit. Cras mollis sed felis ac facilisis. Duis lectus massa

10k +

Customers

5k+ reviews

Apply For GST Audit

Introduction to GST Audits

The Goods and Services Tax (GST), implemented in India in 2017, aims to streamline indirect taxes and bring transparency to the taxation system. Under GST, audits play a critical role in ensuring compliance, verifying the accuracy of records, and curbing tax evasion. A GST audit involves the examination of a taxpayer's records, returns, and financial statements to ensure compliance with the provisions of the GST Act.

GST audits are conducted primarily in two ways:

  • GST Audit by Professionals (CA/CMA): Audit by a Chartered Accountant (CA) or Cost and Management Accountant (CMA) under Section 35(5) of the CGST Act.
  • GST Audit by the GST Department: Audit by GST officers under Section 65 or Section 66 of the CGST Act.

Types of GST Audits

  • Audit under Section 35(5): Conducted by a CA/CMA when turnover exceeds the threshold limit.
  • Audit under Section 65 (Departmental Audit): Conducted by GST officials.
  • Special Audit under Section 66: Conducted based on directions from a GST officer due to complexity in accounts.

Join 1000+ companies

Is Your Business Audit-Ready? ONE CALL TAX Can Help! Stay ahead of audits and ensure GST compliance with our experienced team.

Call usStart Now

Threshold Limit for GST Audit

As per the GST Act:

  • GST audit under Section 35(5) was applicable to taxpayers with an annual turnover exceeding ₹2 Crores.
  • However, in Budget 2021, Section 35(5) was removed, eliminating mandatory GST audits by CA/CMA for turnovers above ₹2 Crores.
  • Departmental and Special Audits continue to exist and can be ordered by the GST department for specific reasons.

Latest Amendments Related to GST Audits

The key amendments regarding GST audits include:

  • Removal of mandatory GST audit by CA/CMA under Section 35(5) in Budget 2021. Taxpayers are now required to self-certify their reconciliation statements in GSTR-9C.
  • The threshold limit for GST audits by the department remains at the discretion of GST officers under Section 65 or 66.
  • Timeline for departmental audits has been specified as per Rule 101 of CGST Rules, 2017.

Join 1000+ companies

Confused About GSTR-9C or Special Audits? Call ONE CALL TAX! We’ll guide you through GST reconciliations and audits with ease and accuracy.

Call usStart Now

GST Audit Process Flow Chart (process step)

Below is a flowchart explaining the GST audit process for audits conducted by the department and professionals:
  1. 1Notice Issued for GST Audit
    • 2Audit Initiation and Document Request
      • Books of Accounts, Returns, Invoices
    • 3Examination of Records and Verification
      • Tax Liability, ITC, Turnover, Payments
    • 4Audit Observations and Communication to Taxpayer
      • 5Taxpayer Response and Clarification
        • 6Final Audit Report and Compliance
          • Payment of Dues, Penalties if any

        Detailed GST Audit Process

        1. GST Audit by CA/CMA (Now Abolished)

        Previously, taxpayers with an annual turnover exceeding ₹2 Crores were required to get their accounts audited by a CA/CMA and submit Form GSTR-9C.

        Key Steps Included:

        • Verification of financial records and GST returns.
        • Reconciliation of turnover, Input Tax Credit (ITC), and tax paid.
        • Submission of audit findings in Form GSTR-9C.

        However, this provision has been removed, and taxpayers now need to self-certify their reconciliation statements.

        2. GST Audit by Department (Section 65)

        The GST department conducts audits to verify the accuracy of returns and financial records.

        Steps in Departmental GST Audit:

        • Notice Issuance: The GST officer issues a notice to the taxpayer specifying the audit period and documents required.
        • Document Verification: Taxpayer submits books of accounts, returns, invoices, and other records for examination.
        • On-Site Visit: GST officials may conduct an on-site audit at the taxpayer's business premises.
        • Audit Findings: Discrepancies, if any, are communicated to the taxpayer.
        • Compliance: Taxpayer rectifies issues or pays additional tax, interest, or penalties as applicable.

        Time Limit

        As per Rule 101 of CGST Rules, the audit must be completed within 3 months from the date of initiation, extendable by 6 months.

        Join 1000+ companies

        Protect Your Business with ONE CALL TAX's GST Experts! Don’t risk penalties—let us handle your GST audits seamlessly.

        Call usStart Now

        Special Audit (Section 66)

        A Special Audit is initiated when the GST officer believes that:

        • There is a complexity in accounts.
        • The taxpayer's input tax credit (ITC) claims or tax liability need further verification.

        Steps in Special Audit:

        • The officer directs the taxpayer to undergo an audit by a nominated CA/CMA.
        • The special auditor prepares and submits a report within 90 days (extendable by 90 more days).
        • Based on findings, the GST officer takes necessary actions for tax recovery or compliance.

        Cost of Special Audit

        The expenses for a Special Audit are borne by the GST Department.

        Time Limits for GST Audit

        The time limits for various GST audits are as follows:

        Audit TypeTime Limit
        Departmental Audit (Section 65)3 months (extendable to 6 months)
        Special Audit (Section 66)90 days (extendable by another 90 days
        Scrutiny of ReturnsWithin 3-5 years from the filing date

        Conclusion

        GST audits are essential for maintaining transparency and ensuring compliance under the GST regime. While the mandatory audit requirement by CA/CMA has been removed, taxpayers must ensure proper reconciliation and self-certification of GSTR-9C to avoid penalties. The GST department still conducts departmental and special audits for complex cases.

        It is crucial for businesses to maintain accurate records, reconcile returns timely, and stay updated with GST amendments to avoid legal and financial implications.

        • GST Audit
        • GST Department Audit
        • GST Audit Process
        • Threshold Limit for GST Audit
        • Latest GST Audit Amendments
        • Special Audit in GST
        • Departmental GST Audit
        • GSTR-9C

        Frequently asked questions

        OneCallTax

        SERVICES

        2025 One Call Tax a brand of EFINENG IMS LLP - All Right Reserved

        Privacy PolicyTerms of use