Audit under Goods and Services Tax Law – GST

The purpose of audit under GST law is to assess the compliance with the provisions of GST and to verify the correctness of turnover declared, tax paid, input tax credit availed and refund claimed.

Audit is a process of examining records, returns and other relevant documents maintained by the registered person to know how far compliance under GST Law has been carried out by the tax payer.

In this article, we will be discussing when audit under GST law can be carried on and the person who can be appointed as auditor.

Audit under goods and service tax gst

Under GST law, audit of accounts and records are mandatory only when the turnover during the financial year exceeds Rs 1 Crore.

If turnover exceeds the limit of Rs 1 Crore then the accounts are to be audited by a chartered accountant or a cost accountant.

After the audit of accounts, a copy of the audited statement of accounts together with the electronic reconciliation statement is to be submitted to the proper officer appointed under GST law by 31st December of the next Financial Year.

In this case, the chartered accountant or cost account can be appointed by the registered person on his own. They are not required to take any departmental approval for such appointment.

Also Read: Accounts and Records to be maintained by Registered Person

Audit by tax authorities

The commissioner of CGST or SGST or any officer authorized by them may conduct the audit. Before conducting, notice will be sent to the tax payer at least before 15 days.

In such case, the audit shall be completed within 3 months from the date of commencement. The commissioner can extend the period for a further period of 6 months with reason recorded in writing.

During the course of the audit,  the registered person require to afford him the necessary facility to verify the books of account or other documents as he may require and has to furnish such information as he may require and render assistance for timely completion.

After completion, the officer has to inform the registered person within 30 days about the findings. If tax has not been paid or short paid or wrong refund obtained then demand and recovery action will be initiated.

Special Audit under GST Law

Considering the nature and complexity of the case, the assistant commissioner with the approval of the commissioner may order for a special audit by Chartered Accountant or Cost Accountant nominated by the department.

The special audit can also be initiated if the assistant commissioner is of the opinion that the value has not been correctly declared or the wrong credit has been availed.

The special audit can be ordered even in cases where the tax payer has already been audited by a charted accountant.

If the special audit has been ordered then the chartered accountant or cost accountant appointed for such audit shall submit their report within the period of 90 days.

Audit period of 90 days can further be extended by the assistant commissioner for another period of 90 days on an application made by the taxable person or the auditor.

After completion of the special audit, the registered person shall be given an opportunity of being heard in respect of any material gathered. If the audit results in short paid tax or wrong refund or input tax credit wrongly taken then demand and recovery action may be initiated by the department.


Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.