Definition and Objective

• GST audit is an examination of records, returns, and documents of a registered person
  
• It ensures correctness of turnover declared, taxes paid, and ITC claimed
  
• The audit verifies compliance with GST provisions and accuracy of disclosures
  
• Governed under Section 65 and 66 of the CGST Act
  
• Conducted by tax authorities or independent professionals in specified cases
  

Threshold for Mandatory Audit (Old Regime)

• Previously, taxpayers with aggregate turnover above ₹5 crore had to file GSTR-9C
  
• GSTR-9C is a reconciliation between audited financial statements and GSTR-9
  
• This audit had to be certified by a Chartered Accountant or Cost Accountant
  
• The threshold was based on PAN-level turnover across all GSTINs
  
• The mandatory audit by professionals was waived from FY 2020-21 onwards
  

Departmental GST Audit

• Conducted by officers authorized by the Commissioner of GST
  
• Applicable to any registered person as determined by the department
  
• Notice is issued at least 15 working days before the audit begins
  
• The audit must be completed within three months, extendable by six months
  
• The registered person must cooperate and produce required documents
  

Special Audit Provisions

• Ordered by the Assistant Commissioner with prior approval
  
• Conducted by a Chartered or Cost Accountant nominated by the department
  
• Triggered when complexity, revenue risk, or incorrect disclosures are suspected
  
• Audit findings may result in additional tax demands and penalties
  
• Taxpayer is given an opportunity of being heard before action
  

Compliance and Documentation

• Maintain books of accounts, invoices, and digital records for at least 6 years
  
• Reconcile GSTR-1, GSTR-3B, GSTR-9, and books of account
  
• Keep records of ITC claimed, reversed, or adjusted
  
• Respond to audit queries and furnish explanations in time
  
• Maintain internal checks to prevent audit objections