GST compliance needs more than monthly filings. Errors in classification, input tax credit or reverse charge often go unnoticed until a departmental audit or notice brings them to light. Our GST audit services help you find and fix issues early, and represent you confidently when the department audits your records.
Types of GST Audit
- Self-reconciliation (annual return) – the earlier mandatory audit by a chartered accountant has been replaced by the self-certified reconciliation statement in GSTR-9C for taxpayers above the notified turnover limit. Careful reconciliation of books with returns remains essential.
- Departmental audit (Section 65) – the tax department can audit a registered person's records at its own premises or at the taxpayer's place of business, after giving advance notice.
- Special audit (Section 66) – where the department considers the value declared or the credit availed incorrect, it can direct an audit by a chartered accountant or cost accountant it nominates.
- Internal GST audit / health check – a voluntary review we carry out to identify risks before the department does.
What a GST Health Check Covers
- Reconciliation of turnover, tax liability and ITC between books, GSTR-1, GSTR-3B and GSTR-2B
- Review of HSN/SAC classification and tax rates applied
- Eligibility of input tax credit and reversals required
- Reverse charge, place of supply and valuation issues
- E-invoicing and e-way bill compliance
- Exports, refunds and related-party transactions
Departmental Audit Process
- Notice of audit (Form GST ADT-01) issued at least 15 working days in advance
- Examination of books, returns and records
- Discussion of observations with the taxpayer
- Audit findings communicated in Form GST ADT-02
- Demand proceedings, if any, under the applicable provisions
A departmental audit generally has to be completed within three months, extendable by up to six more months.
Consequences of Non-Compliance
Discrepancies found in an audit can lead to demand for tax, interest and penalties. Failure to cooperate with or submit a special audit report can attract further penalties and best-judgement assessment.
Frequently Asked Questions
Is a GST audit by a chartered accountant still mandatory?
No. The mandatory CA audit was removed. Taxpayers above the notified turnover now file a self-certified reconciliation statement in GSTR-9C along with the annual return.
How should we prepare for a departmental GST audit?
Reconcile your returns with your books, review ITC eligibility and keep invoices, contracts and records ready. A pre-audit health check is the best preparation.
Who conducts a special audit?
A chartered accountant or cost accountant nominated by the Commissioner. The report must normally be submitted within 90 days, extendable by another 90 days.