Analysis of Audit by Tax Authorities & Special Audit Section 65 & Section 66 (Happy GST series – 29) by CA Rajender Arora
Basis Audit by Tax Authorities Special Audit
Applicable
Section
Section 65 Section 65
Applicable Rule Rule 101 Rule 102
Other Applicable
Sections
Section 70 & 71 to give evidence or to produce a document or any
other thing. Section 73 & 74 on demand of tax or other amounts.
Section 122, 123 and 125 for not complying with the request of the
department to facilitate conduct of Audit.
Circumstances If in scrutiny, inquiry, investigation
or any other proceedings, PO is of
the opinion that the value has not
been correctly declared or the credit
availed is not within the normal
limits.
Order The PO, by way of a general or
a specific order, may
undertake audit of any RP for
such period, at such
frequency and in such manner
as may be prescribed
Place of Audit may conduct audit at the
place of business of the
registered person or in their
office. Business Premises can
be accessed as per Section
71(2).
Business Premises can be accessed
as per Section 71(2).
Period to be
covered during
audit
financial year, or part thereof
or multiples thereof to cover
the retrospective period up to
the previous audit or the
limitation period specified in
Section 73 or 74. [As per
GSTAM-2019 by CBIC].
While
Conducting Audit
PO may require RP to:-
(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.
The RP shall be given an opportunity
of being heard in respect of any
material gathered
on the basis of special audit which is
proposed to be used in any
proceedings against him.
Prior Intimation RP shall be informed by way PO shall issue direction to RP in
of a notice not less than
fifteen working days prior to
the conduct of audit in FORM
GST ADT-01.
FORM GST ADT-03.
Meaning of PO Commissioner or the officers
authorized by him.
Assistant Commissioner or the
officers authorized by him, with the
prior approval of the Commissioner.
Conducted by Proper Officer (PO) chartered accountant or a cost
accountant as may be nominated by
the Commissioner.
Remuneration Audit is to be conducted by
Department itself. So no
requirement to Pay
Remuneration.
determined and paid by the
Commissioner.
What if Accounts
are already
Audited
As the earlier audit was
conducted u/s 35(5) by
chartered accountant or a
cost accountant but this Audit
is to be conducted by
Department itself. So this
audit can also be conducted
separately.
Audit shall be conducted even if
accounts are already audited.
Timelines
i. Normal
Time
ii. Extended
Time
within a period of three
months from the date of
commencement of the audit.
within the period of ninety days.
extend the period by a further
period not exceeding six
months.
extend the said period by a further
period of ninety days.
Consequences
After Completion
of Audit
i. Duty of
Officer
ii. Power of
Officer
PO within thirty days, inform
the RP about the findings, his
rights and obligations and the
reasons for such findings in
FORM GST ADT-02.
RP shall be informed of the findings
of the special audit in FORM GST
ADT-04.
Audit results in detection of tax not paid or short paid or erroneously
refunded, or input tax credit wrongly availed or utilised, PO may
initiate action under section 73 or section 74.
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