Audit · Sections 65 and 66
GST audit and special audit: your response kit
An audit looks at your records for a period, either by the department (section 65) or by a nominated accountant (section 66). The notice, the duration and the findings all have set steps.
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What it is
The Commissioner or an authorised officer may order an audit, by general or specific order, at the place of business or in the office. The period may be a financial year, part of one, or several years.
CGST Act, section 65(1)-(2); CGST Rules, rule 101(1) · sources listed below
The notice is in FORM GST ADT-01 and must be given at least 15 working days before the audit.
CGST Act, section 65(3); CGST Rules, rule 101(2) · sources listed below
The audit must be completed within 3 months of commencement; the Commissioner may extend it by up to 6 months, with reasons recorded. Commencement is the later of the date the records called for are made available and the date the audit actually starts at the place of business.
CGST Act, section 65(4) and Explanation · source listed below
A special audit is directed, at any stage of scrutiny, inquiry, investigation or other proceedings, by an officer not below Assistant Commissioner with the Commissioner's prior approval, when he considers the value declared incorrect or the credit availed not within normal limits. The audit is by a chartered or cost accountant nominated by the Commissioner. The direction is in ADT-03.
CGST Act, section 66(1); CGST Rules, rule 102(1) · sources listed below
Your rights
On conclusion of the audit, the officer must within 30 days inform you of the findings, your rights and obligations and the reasons, in FORM GST ADT-02.
CGST Act, section 65(6); CGST Rules, rule 101(5) · sources listed below
The officer may put discrepancies to you first. You may file a reply, and the officer considers it before the findings are finalised. No period for that reply is fixed.
CGST Rules, rule 101(4) · source listed below
Where an issue rests on an interpretation followed as prevalent trade practice, the Zonal Chief Commissioner should refer it to GST Policy or the Tax Research Unit. This applies to audit, including ongoing audits.
CBIC Instruction 03/2024-GST, applying para 2(g) of Instruction 01/2023-24 · source listed below
You must be given an opportunity of being heard on any material gathered on the basis of a special audit before it is used against you.
CGST Act, section 66(4) · source listed below
The cost of a special audit is paid by the Commissioner, not by you.
CGST Act, section 66(5) · source listed below
The findings of a special audit are communicated to you in FORM GST ADT-04.
CGST Rules, rule 102(2) · source listed below
Your duties
You must provide the facilities required to verify your books of account and other documents, furnish the information asked for and render assistance to complete the audit in time.
CGST Act, section 65(5) · source listed below
What to do now
- Read the ADT-01: the period, the records called for and the date the audit starts. Note the 15 working days from the date of the notice.
- Run a self-review before the officer does: reconcile returns with the books and test ITC.
- Compile and index the records. Hand them over with a covering letter and keep an acknowledged copy.
- Answer queries in writing, point by point, with the supporting document referenced.
- When ADT-02 arrives, mark what you accept and what you dispute, with evidence, before it hardens into a show cause notice.
- For a special audit, track the report dates and ask in writing to be heard before the findings are used.
These steps are practical suggestions from our expert team, not statements of law.
Documents to keep ready
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Key time limits
| For | Time limit | Provision |
|---|---|---|
| Notice before the audit | Time limitAt least 15 working days before the audit | Provision and sourceCGST Act, section 65(3); CGST Rules, rule 101(2) |
| Duration of the audit | Time limit3 months from commencement; extendable by up to 6 months | Provision and sourceCGST Act, section 65(4) |
| Findings in ADT-02 | Time limitWithin 30 days of conclusion of the audit | Provision and sourceCGST Act, section 65(6); CGST Rules, rule 101(5) |
| Special audit report | Time limitWithin 90 days; extendable by a further 90 days on application or for sufficient reason | Provision and sourceCGST Act, section 66(2) |
| Hearing on special-audit material | Time limitBefore the material is used against you: no period is fixed in the law | Provision and sourceCGST Act, section 66(4) |
The date or period stated in your own notice or order always applies.
What can happen next
- Notice of departmental auditAt least 15 working days before the audit.
- Audit report: findingsWithin 30 days of conclusion; a short payment found leads to action under Section 73, 74 or 74A.
- Direction for special auditReport in 90 days, extendable by a further 90.
- Findings of special auditYou must be heard before the material is used; a demand may follow.
- Pre-notice intimation of liabilityTax found short may first be communicated in DRC-01A (optional).
- Show cause noticeAction on the findings follows under Section 73, 74 or 74A (Sections 65(7) and 66(6)).
Read the full guide: GST Audit by the Department: Section 65, ADT-01 Notice, Timelines and Special Audit Under Section 66
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Frequently asked questions
How much notice must the department give before a GST audit?
At least 15 working days, in FORM GST ADT-01.
How long can a GST audit take?
Three months from commencement, which the Commissioner may extend by up to six months with reasons recorded. Commencement is the later of the date the records are made available and the date the audit actually starts at your place of business.
When do I get the audit findings?
The officer must inform you of the findings, your rights and obligations and the reasons within 30 days of conclusion, in ADT-02. Discrepancies may be put to you first, and your reply is considered before the findings are final.
What follows if the audit finds tax short paid?
Action under section 73, 74 or 74A. Paying accepted points through DRC-03 before a notice keeps the penalty to the lowest the section allows.
What is a special audit and who pays for it?
A special audit is directed under section 66 by an officer not below Assistant Commissioner, with the Commissioner's prior approval, when value declared seems incorrect or credit availed seems outside normal limits. It is done by a chartered or cost accountant nominated by the Commissioner, and the Commissioner pays the cost. The report is due in 90 days, extendable by a further 90.
Can special-audit findings be used against me without a hearing?
No. Section 66(4) gives you an opportunity of being heard on any material gathered on the basis of the special audit.
Official sources
- CGST Act 2017, section 65 (audit by tax authorities)Read on 24 October 2026
- CGST Rules 2017, rule 101 (audit)Read on 24 October 2026
- CGST Act 2017, section 66 (special audit)Read on 24 October 2026
- CGST Rules 2017, rule 102 (special audit)Read on 24 October 2026
- CBIC Instruction No. 03/2024-GST, 14 August 2024: audit and prevalent trade practiceRead on 21 October 2026
General information from the Acts, Rules, circulars and instructions named beside each point, not legal advice. The dates and periods stated in your own notice or order always apply. Our expert team can read your documents with you.