SECTION 65 - AUDIT BY AUTHORITIES UNDER CGST ACT 2017 WITH RULES THERE UNDER

Section 65. Audit by tax authorities.-

(1) Authority and Period of Audit:

Ø  The Commissioner or any officer authorised by him,

Ø  may undertake audit

Ø  for such period, (year/ part of year / multiple years)

Ø  at such frequency

Ø  in such manner as may be prescribed.

(2) Place of Audit:

Ø  The officers

Ø  may conduct audit

Ø  at the place of business

Ø  or in their office.

(3) Notice for Audit:

Ø  The registered person shall be informed by way of a notice (GST ADT – 01)

Ø  not less than fifteen working days prior

Ø  to the conduct of audit in such manner as may be prescribed.

(4) Time limit to complete audit:

Ø  The audit shall be completed

Ø  within a period of three months

Ø  from the date of commencement of the audit:

Ø   

Ø  Provided that Commissioner

Ø  may extend the period

Ø  for the reasons to be recorded in writing

Ø  by a further period not exceeding six months

Ø   

Ø  Explanation.- "commencement of audit" mean

Ø  the date on which the records and other documents are made available

Ø  or the actual institution of audit at the place of business,

Ø  whichever is later.

(5) provide books documents to officer:

Ø  During audit, the officer may require the person,

Ø  (i) to afford him the necessary facility to verify the books or other documents he may require;

Ø  (ii) to furnish such information as he may require and

Ø  render assistance for timely completion of the audit.

(6) audit findings:

Ø  On conclusion of audit,

Ø  the proper officer shall,

Ø  within thirty days,

Ø  inform the registered person,

Ø  about the findings, his rights and obligations and the reasons for such findings. (GST ADT – 02)

(7) action if tax payable or input wrongly availed:

Ø  Where the audit conducted

Ø  results in detection of tax not paid or short paid or erroneously refunded,

Ø  or input tax credit wrongly availed or utilised,

Ø  the proper officer may initiate action under section 73 or section 74.

 

Rule 101. Audit.-

(1) Period of Audit:

Ø  The period of audit

Ø  shall be a financial year / part thereof / multiples thereof.

(2) GST ADT – 01 – form for notice of audit:

Ø  the proper officer shall issue a notice in FORM GST ADT-01 

(3) Area of audit:

Ø  The proper officer authorised shall,

Ø  verify the documents, books of account, returns and statements

Ø  the correctness of:

1.       the turnover,

2.       exemptions,

3.       deductions claimed,

4.       the rate of tax applied,

5.       the input tax credit availed and utilised,

6.       refund claimed,

7.       other relevant issues.

Ø  and record the observations in his audit notes.

(4) Communication during audit:

Ø  The proper officer may inform the discrepancies noticed, in the audit

Ø  and the said person may file his reply

Ø  and the proper officer shall finalise the findings of the audit

Ø  after due consideration of the reply furnished.

(5) Inform findings to person:

Ø  On conclusion of the audit,

Ø  the officer shall inform the findings to the person 

Ø  in FORM GST ADT-02.

 

 

Section 65. Audit by tax authorities.-

(1) The Commissioner or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed.

(2) The officers referred to in sub-section (1) may conduct audit at the place of business of the registered person or in their office.

(3) The registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed.

(4) The audit under sub-section (1) shall be completed within a period of three months from the date of commencement of the audit:

Provided that where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months.

Explanation.- For the purposes of this sub-section, the expression "commencement of audit" shall mean the date on which the records and other documents, called for by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later.

(5) During the course of audit, the authorised officer may require the registered person, -

(i) to afford him the necessary facility to verify the books of account or other documents as he may require;

(ii) to furnish such information as he may require and render assistance for timely completion of the audit.

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

(7) Where the audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74.

 

Rule 101. Audit.-

(1) The period of audit to be conducted under sub-section (1) of section 65 shall be a financial year ¹[or part thereof] or multiples thereof.

(2) Where it is decided to undertake the audit of a registered person in accordance with the provisions of section 65, the proper officer shall issue a notice in FORM GST ADT-01 in accordance with the provisions of sub-section (3) of the said section.

(3) The proper officer authorised to conduct audit of the records and the books of account of the registered person shall, with the assistance of the team of officers and officials accompanying him, verify the documents on the basis of which the books of account are maintained and the returns and statements furnished under the provisions of the Act and the rules made thereunder, the correctness of the turnover, exemptions and deductions claimed, the rate of tax applied in respect of the supply of goods or services or both, the input tax credit availed and utilised ,refund claimed, and other relevant issues and record the observations in his audit notes.

(4) The proper officer may inform the registered person of the discrepancies noticed, if any, as observed in the audit and the said person may file his reply and the proper officer shall finalise the findings of the audit after due consideration of the reply furnished.

(5) On conclusion of the audit, the proper officer shall inform the findings of audit to the registered person in accordance with the provisions of sub-section (6) of section 65 in FORM GST ADT-02.