Three Types of GST Audit
| Type | Section | Initiated by |
|---|---|---|
| Departmental audit | Section 65 | Commissioner or authorised officer |
| Special audit | Section 66 | Officer directs a CA/CMA to conduct it |
| Self audit (GSTR-9C earlier) | Section 35(5) | Earlier mandatory above ₹2 crore (now self-certified) |
Section 65 — Departmental Audit
The Commissioner can authorise any officer to audit any registered person's books for a particular period.
Process
- ADT-01 — Notice issued 15 days before audit begins
- Audit conducted at your business premises or office of the officer
- You must provide books, GST returns, invoices, e-way bills, financial statements, etc.
- Audit completed within 3 months of commencement (extendable by 6 months by Commissioner)
- ADT-02 — Audit report issued within 30 days of conclusion
- If discrepancies found and tax/interest demand made — Section 73/74 proceedings begin
Section 66 — Special Audit
If during scrutiny, inquiry or assessment the officer feels the value of supply or ITC claimed is incorrect, they can — with Commissioner's prior approval — direct a special audit by a CA/CMA.
- Notice in Form ADT-03
- CA/CMA submits report within 90 days (extendable by another 90 days)
- Cost of audit is borne by the department
- Report (Form ADT-04) is shared with you; you have right to be heard before any demand
Documents Auditors Typically Ask For
- Books of accounts — purchase, sales, journal, ledger
- All GST returns filed (GSTR-1, 3B, 9, 9C)
- Tax invoices issued and received
- E-way bills and shipping bills
- Bank statements
- Audited financial statements and tax audit report (Form 3CD)
- Reconciliation between GST returns and books
- HSN-wise stock register
- Computation of ITC and reversals
- RCM ledger and self-invoices
Your Rights During Audit
- 15-day advance notice (Section 65 audit cannot be a surprise)
- Right to be informed of discrepancies before audit report is finalised
- Right to be heard before any demand is raised (Section 73/74 process)
- Right to appeal against any demand order
- Right to professional representation
How to Prepare
- Reconcile GST returns with books quarterly — not at audit time
- Maintain a separate file for each FY with all key documents
- Document every ITC claim with supplier invoice + GSTR-2B printout
- Keep e-way bills attached to corresponding invoices
- Maintain RCM register with self-invoices and payment vouchers
- Have your reconciliation working ready: books ↔ GSTR-1 ↔ GSTR-3B ↔ GSTR-9
In iAccounting
iAccounting maintains an audit-ready trail of every transaction — invoice, e-way bill, GSTR-1, GSTR-2B match, GSTR-3B, payment record — drill-down accessible during any audit. Audit report PDF generates in minutes.
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