Sec 65(1): Audit by Tax Authorities 

Any registered person may be audited by the Commissioner or any officer designated by him, pursuant to a general or a specific order, for the time period, with the frequency, and in the manner specified.

Sec 65(2): Place of Conduct of Audit

The officers mentioned in subsection (1) may conduct an audit at the registered person’s place of business or in their office.

Sec 65(3): Intimation

The registered person must receive notice of the audit’s upcoming conduct at least fifteen working days in advance, in the manner that may be required.

The taxable person must receive notice of the audit in Form GST ADT-01 at least 15 days in advance.


gst audit
Sec 65(4): Period of Completion

The audit required by sub-Section (1) must be finished within three months of the audit’s start date:

With the proviso that the Commissioner may, for reasons to be recorded in writing, extend the period by an additional period of not more than six months if he is satisfied that the audit in respect of such registered person cannot be finished within three months. Explanation.- For the purposes of this subsection, “commencement of audit” refers to the later of the dates that the registered person or the actual institution of audit at the place of business provides the records and other documents requested by the tax authorities. This audit must be finished within 3 months of the audit’s start date, but the Commissioner may, in certain circumstances, grant an additional extension of up to 6 months. Any such extension must be justified in writing by the Commissioner.

Section 65(5): Auditee’s Responsibility

The authorized officer may demand the registered person perform the following during the audit:

(i) To provide him with the facility he needs to check the books of accounts or other documents as needed,

(ii) To provide any information he may need and offer assistance in order to complete the audit on time.

Sec 65(6): Audit Report 

The proper officer must inform the registered person whose records were audited of the findings, his rights and obligations, and the reasons for the findings within thirty days of the audit’s conclusion. Following the completion of the audit, information, including the audit’s findings, must be given to the registered person in FORM GST ADT-02 within thirty days of the audit’s conclusion.


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Sec 65(7): Consequences

Where the audit carried out in accordance with subsection (1) identifies

1. Tax not paid, or
2. Such short-paid, or
3. Erroneously refunded, or
4. Input tax credit wrongly availed or utilized,
5. The proper officer may initiate action under Section 73 or 74.


Read More: GST, IT, Companies, PF, and ESI Acts Due Dates: October 2022

In cases where

1. Tax liability is identified during the audit or
2. Input tax credit wrongly availed or utilized by the auditee, the procedure laid down under Section 73 or 74 is to be followed. The audit cannot conclude automatically resulting in a demand. Independent application of mind is necessary for a valid demand to be raised.