Can Statutory Auditor Do GST Audit?

Can Statutory Auditor Do GST Audit?

The question “Can Statutory Auditor Do GST Audit?” needs to be understood differently under the current GST framework because the earlier turnover-based mandatory GST audit by a Chartered Accountant or Cost Accountant has been discontinued.

Under the earlier GST law, specified registered persons were required to get their accounts audited by a Chartered Accountant or Cost Accountant under Section 35(5) of the CGST Act. This provision was omitted with effect from 1 August 2021.

Today, the principal statutory GST audit mechanisms are departmental audit under Section 65 and special audit under Section 66 of the Central Goods and Services Tax Act, 2017.

Accordingly, the answer depends upon what is meant by “GST audit”. A company’s statutory auditor does not conduct a departmental audit under Section 65. A special audit under Section 66 is conducted by a Chartered Accountant or Cost Accountant specifically nominated by the Commissioner. Businesses may also voluntarily engage professionals for GST health checks and compliance reviews, subject to applicable professional-independence and Companies Act requirements.

For comprehensive assistance with GST audits, reconciliations and departmental proceedings, refer to our GST Audit Services in India.

Can a Statutory Auditor Do GST Audit? Quick Answer

Current Position under GST Law

The old system under which businesses crossing a prescribed turnover threshold appointed a Chartered Accountant or Cost Accountant to carry out a mandatory GST audit no longer applies.

Therefore, a company does not presently need to appoint its statutory auditor—or another Chartered Accountant—as its mandatory turnover-based GST auditor merely because its turnover exceeds a particular level.

It Depends on the Type of GST Audit

The current answer can broadly be understood as follows:

• Section 65 departmental audit: conducted by the Commissioner or an officer authorised by the Commissioner.
• Section 66 special audit: conducted by a Chartered Accountant or Cost Accountant nominated by the Commissioner.
• Voluntary GST compliance review: may be undertaken by an appropriately qualified professional, subject to engagement scope, independence and applicable professional requirements.
• GSTR-9C: under the current framework, this is a self-certified reconciliation statement where applicable and is not the old auditor-certified GST audit report.

Why the Earlier Answer on Statutory Auditor and GST Audit Has Changed

Earlier Section 35(5) GST Audit Requirement

Under the earlier provisions of Section 35(5) of the CGST Act, specified registered persons crossing the prescribed turnover threshold were required to get their accounts audited by a Chartered Accountant or Cost Accountant.

This created practical questions such as:

• whether the company’s statutory auditor could also be appointed as GST auditor;
• whether another Chartered Accountant should be appointed;
• whether internal auditors could conduct GST audit;
• whether separate GST auditors could be appointed for different registrations; and
• whether the engagement affected auditor independence.

Section 35(5) Was Omitted

The turnover-based professional GST audit requirement under Section 35(5) was subsequently removed.

The earlier article on this subject therefore should not be read as describing the present GST-audit framework.

The current statutory framework should instead be analysed with reference to Sections 65 and 66 of the CGST Act and the applicable annual-return and reconciliation requirements.

What Does GST Audit Mean under the Current Law?

Departmental Audit under Section 65

Section 65 empowers the Commissioner or an officer authorised by the Commissioner to undertake an audit of a registered person.

This is an audit by the GST authorities and is fundamentally different from the earlier turnover-based audit by an external Chartered Accountant or Cost Accountant.

Special Audit under Section 66

Section 66 provides for a special audit in specified circumstances.

The audit is carried out by a Chartered Accountant or Cost Accountant nominated by the Commissioner.

The taxpayer does not simply appoint its regular statutory auditor to conduct the special audit.

Voluntary GST Compliance Review

Businesses may also undertake internal or independent GST compliance reviews even where no departmental audit has been initiated.

A voluntary review may examine:

• GST registrations;
• GSTR-1;
• GSTR-3B;
• GSTR-2B;
• Invoice Management System records;
• input tax credit;
• reverse charge;
• e-invoicing;
• e-way bills;
• classification;
• GST rates;
• place of supply;
• exports and refunds; and
• reconciliation with financial statements.

For a structured review of these areas, refer to our GST Audit Checklist.

Can the Statutory Auditor Conduct a Section 65 GST Audit?

Section 65 Audit Is Conducted by GST Authorities

No company-appointed auditor conducts the statutory departmental audit contemplated under Section 65.

The audit is undertaken by the Commissioner or an officer authorised by the Commissioner in accordance with the CGST Act and Rules.

Role of the Company’s Statutory Auditor during Departmental Audit

Although the statutory auditor does not become the Section 65 auditor, the company’s finance and audit professionals may assist management in preparing the records required during departmental proceedings.

This may include:

• audited financial statements;
• trial balance;
• ledger extracts;
• turnover reconciliation;
• GST return reconciliation;
• input tax credit workings;
• fixed asset records;
• tax-payment workings;
• supporting invoices; and
• explanations regarding accounting treatment.

Businesses facing a departmental audit may refer to our GST Audit Services in India for audit-readiness and reconciliation support.

Can the Statutory Auditor Conduct a Special Audit under Section 66?

Commissioner Nominates the Special Auditor

Under Section 66, the Chartered Accountant or Cost Accountant conducting the special audit is nominated by the Commissioner.

Therefore, the taxpayer does not have an unrestricted choice to appoint its existing statutory auditor as the special auditor.

If the Statutory Auditor Is Nominated

If a professional who also has an existing audit relationship with the taxpayer is proposed or nominated for another professional assignment, the relevant independence, eligibility, ethical and legal requirements should be reviewed before accepting the engagement.

The mere fact that a person is the statutory auditor does not by itself convert that person into the GST special auditor.

Purpose of Special Audit

A special audit may be directed where the prescribed statutory conditions are satisfied, including circumstances involving complexity and concerns regarding value declared or input tax credit availed.

The purpose is to facilitate a specialised examination of records where the tax authorities consider additional professional examination necessary.

Departmental GST Audit under Section 65

Notice in FORM GST ADT-01

Where a departmental audit is undertaken under Section 65, the prescribed procedure includes issuance of notice in FORM GST ADT-01.

A taxpayer receiving ADT-01 should immediately identify:

• financial year or period covered;
• GST registrations involved;
• documents requested;
• submission deadline;
• officer conducting the audit; and
• reconciliation work required before submission.

What GST Authorities May Examine

The audit may involve verification of matters including:

• turnover declared;
• exemptions and deductions;
• GST rate applied;
• input tax credit availed and utilised;
• GST refunds claimed;
• books of account;
• GST returns;
• supporting documents; and
• other matters relevant to compliance with GST law.

Audit Findings in FORM GST ADT-02

On conclusion of the departmental audit, the findings are communicated to the taxpayer through the prescribed procedure, including FORM GST ADT-02.

Where discrepancies are identified, businesses should reconcile the factual position and evaluate whether corrective payment, written explanation or further proceedings may be required.

Special Audit under Section 66 of the CGST Act

When a Special Audit May Be Directed

A special audit is not a routine annual GST audit.

It may be directed in circumstances contemplated by Section 66 where the proper officer, having regard to the nature and complexity of the case and the interest of revenue, considers specialised examination necessary.

Chartered Accountant or Cost Accountant Nominated by Commissioner

The special audit is conducted by the Chartered Accountant or Cost Accountant specified in the direction issued by the authorities.

The prescribed process includes FORM GST ADT-03.

Special Audit Findings

On conclusion of the special audit, the taxpayer is informed of the findings through the prescribed procedure, including FORM GST ADT-04.

Where findings are proposed to be used against the taxpayer, the statutory opportunity of being heard should also be considered in accordance with the applicable provisions.

Is GSTR-9C Still a GST Audit Report?

Current GSTR-9C Framework

GSTR-9C continues to be relevant for taxpayers to whom the applicable reconciliation-statement requirement applies.

However, under the present framework, GSTR-9C is a self-certified reconciliation statement rather than the earlier auditor-certified GST audit report.

Do Businesses Need a CA to Certify GSTR-9C?

The old framework involving certification of GSTR-9C by a Chartered Accountant or Cost Accountant should not be confused with the current self-certification mechanism.

Businesses may nevertheless obtain professional assistance to prepare the reconciliations underlying GSTR-9C and to identify discrepancies before filing.

Reconciliation Is Still Important

The discontinuation of the old mandatory GST audit does not eliminate the need for proper annual GST reconciliation.

Businesses should continue to reconcile:

• financial-statement turnover;
• GST turnover;
• GSTR-1;
• GSTR-3B;
• GSTR-2B;
• input tax credit;
• reverse charge;
• exports;
• credit notes;
• refunds;
• tax payments; and
• electronic ledgers.

For return-related support, refer to our GST Return Filing Services in India.

Difference between Statutory Audit and GST Audit

Statutory Audit under the Companies Act

A statutory audit of a company is undertaken under the Companies Act, 2013 by an eligible practising Chartered Accountant.

Its principal purpose is examination of the company’s financial statements and related accounting records in accordance with applicable law and auditing standards.

For more information, refer to our Statutory Audit Services in India.

GST Departmental Audit

A GST departmental audit under Section 65 is an examination conducted by GST authorities to verify compliance with GST law.

It may examine GST returns, tax payments, input tax credit, refunds, turnover and supporting records.

GST Special Audit

A special audit under Section 66 is a specific statutory mechanism under which a Chartered Accountant or Cost Accountant nominated by the Commissioner undertakes the examination.

Area	Who Conducts It?	Primary Framework
Company Statutory Audit	Eligible practising Chartered Accountant	Companies Act, 2013
GST Departmental Audit	Commissioner or authorised GST officer	Section 65, CGST Act
GST Special Audit	CA or Cost Accountant nominated by Commissioner	Section 66, CGST Act
Voluntary GST Compliance Review	Appropriately qualified professional as engaged by taxpayer	Contractual / compliance risk review

Companies Act Section 144 and GST-Related Services

Services Prohibited for a Company’s Statutory Auditor

Section 144 of the Companies Act, 2013 restricts a statutory auditor from providing specified non-audit services directly or indirectly to the company or specified related entities.

The prohibited categories include matters such as:

• accounting and bookkeeping services;
• internal audit;
• design and implementation of financial information systems;
• actuarial services;
• investment advisory services;
• investment banking services;
• outsourced financial services;
• management services; and
• other services that may be prescribed.

GST Work Should Be Analysed by Nature of Service

The description “GST service” alone does not determine whether Section 144 applies.

The actual scope of the engagement must be considered.

For example, independent tax advice or an external compliance review is different in character from assuming a management function, maintaining accounting records or performing an internal-audit function.

Board or Audit Committee Approval

Where another service is proposed to be provided by the statutory auditor, the applicable requirements of Section 144, including approval requirements and prohibited-service restrictions, should be examined before accepting the assignment.

Auditor Independence and Professional Considerations

Avoiding Self-Review Risk

An auditor should consider whether undertaking additional GST work could result in reviewing work that the auditor or audit firm itself prepared or controlled.

This can be particularly relevant where the proposed engagement includes maintenance of records, accounting entries, preparation of underlying data or management decision-making.

Management Responsibility Should Remain with the Company

Management should retain responsibility for:

• books of account;
• GST returns;
• tax positions;
• supporting records;
• management judgments; and
• approval of filings and payments.

Review Engagement Scope before Appointment

Before engaging the statutory auditor for any additional GST-related assignment, businesses should clearly document:

• scope of service;
• responsibilities of management;
• responsibilities of the professional;
• independence considerations;
• Companies Act requirements;
• professional ethical requirements; and
• required approvals.

Who Can Conduct GST-Related Audits and Reviews Today?

Departmental GST Audit

A departmental audit under Section 65 is conducted by GST authorities.

The taxpayer’s Chartered Accountant or GST consultant may assist the business in preparing records and responding to audit observations but does not replace the authorised GST officer conducting the audit.

GST Special Audit

A special audit under Section 66 is undertaken by the Chartered Accountant or Cost Accountant nominated by the Commissioner.

Internal GST Health Check

A business can engage tax professionals to undertake an independent GST health check or compliance review for risk-management purposes.

The engagement can focus on identifying:

• return mismatches;
• ITC risks;
• GST-rate errors;
• classification issues;
• RCM exposures;
• place-of-supply issues;
• e-way bill differences;
• e-invoicing differences;
• refund risks; and
• documentation gaps.

Practical Checklist before Engaging a Statutory Auditor for GST Work

Identify the Exact GST Service

First determine whether the engagement is:

• a departmental audit response;
• a Section 66 special audit;
• a GST compliance review;
• return reconciliation;
• tax advisory;
• GSTR-9C assistance;
• litigation support; or
• another GST assignment.

Check Independence and Companies Act Restrictions

Where the same professional is the company’s statutory auditor, review the proposed scope against the Companies Act, professional standards and applicable independence requirements.

Maintain Clear Documentation

The engagement letter should clearly identify the work being performed and distinguish the professional’s role from management responsibility.

This is particularly important where GST compliance information is subsequently relevant to statutory financial-statement audit procedures.

How EzyBiz India Assists with GST Audit Matters

GST Audit Readiness and Compliance Review

EzyBiz India assists businesses in preparing for GST departmental audits and undertaking preventive GST compliance reviews.

Our support may include:

• books-to-GST reconciliation;
• GSTR-1 versus GSTR-3B reconciliation;
• GSTR-2B and ITC review;
• reverse-charge review;
• turnover reconciliation;
• e-invoice review;
• e-way bill review;
• export review;
• refund documentation; and
• financial-statement reconciliation.

Departmental Audit Support

Where a business receives FORM GST ADT-01 or another audit communication, we assist with document organisation, reconciliations, factual explanations, response preparation and coordination during departmental proceedings.

Post-Audit and Litigation Support

Where audit observations develop into tax-demand proceedings, our GST team can assist with reconciliations, show cause notice responses, adjudication and appellate support.

For dispute-related assistance, refer to our GST Assessment & Litigation Services in India.

Frequently Asked Questions on Statutory Auditor and GST Audit

Is GST audit mandatory above a turnover threshold?

The earlier turnover-based requirement for specified taxpayers to obtain a GST audit from a Chartered Accountant or Cost Accountant has been discontinued.

Businesses may nevertheless be subject to departmental audit, special audit, annual return requirements, reconciliation requirements, scrutiny or other GST proceedings.

Can my statutory auditor conduct a Section 65 GST audit?

No. A Section 65 departmental audit is conducted by the Commissioner or an authorised GST officer.

The company’s statutory auditor or tax professional may assist the business with records and reconciliations but does not conduct the departmental audit itself.

Who conducts a special audit under Section 66?

A special audit under Section 66 is conducted by a Chartered Accountant or Cost Accountant nominated by the Commissioner.

Can the company choose its statutory auditor for a Section 66 special audit?

The company does not have the ordinary freedom to appoint the special auditor. The professional conducting the Section 66 audit is nominated by the Commissioner.

Does GSTR-9C require CA certification?

Under the current framework, GSTR-9C is a self-certified reconciliation statement where applicable rather than the earlier CA/CMA-certified GST audit report.

Can a statutory auditor provide GST advisory services?

The answer depends upon the nature and scope of the service.

The engagement should be reviewed with reference to Section 144 of the Companies Act, applicable professional-independence requirements, ethical standards and management responsibilities.

Should businesses still conduct GST health checks?

Yes. Although the old mandatory turnover-based GST audit has been removed, periodic GST health checks can help identify return mismatches, ITC issues, classification errors, RCM exposures, e-invoicing differences and other risks before departmental scrutiny.

Related Services, Official References and Professional Information

Related Services

• GST Audit Services in India – Departmental GST audit support, GST health checks, reconciliations and audit-readiness assistance.
• GST Audit Checklist – Practical review of GST returns, books, ITC, RCM, e-invoicing and supporting records.
• GST and Indirect Tax Advisory Services in India – Comprehensive GST compliance, advisory, refunds, assessments and litigation support.
• GST Return Filing Services in India – GSTR-1, GSTR-3B, GSTR-2B, IMS, annual returns and GST reconciliation.
• GST Assessment & Litigation Services in India – GST scrutiny, notices, adjudication, appeals and GSTAT matters.
• Statutory Audit Services in India – Statutory audit readiness, schedules, accounting review and audit coordination.
• Tax Audit & Certification Services in India – Tax audit readiness and certification support.

Official References

• Central Goods and Services Tax Act – CBIC
• GST Assessment and Audit Rules – CBIC
• GST Portal – Government of India
• Companies Act, 2013 – India Code

Need assistance with a GST departmental audit or GST compliance review? Contact EzyBiz India for GST audit readiness, reconciliations, documentation review and departmental proceedings support.

Prepared By

EzyBiz India Consulting LLP

EzyBiz India Consulting LLP is an integrated business, tax and regulatory consulting firm providing assistance in GST, income tax, international tax, transfer pricing, FEMA, corporate compliance, audit support, accounting and India market-entry matters.

Reviewed By

Anil Agrawal, Chartered Accountant
Founder, EzyBiz India Consulting LLP

Chartered Accountant with more than 20 years of professional experience in taxation, GST, audit support, regulatory compliance, assessments, appeals and business advisory matters for Indian and international businesses.

Last Updated: September 2026

Disclaimer

The information provided on this page is for general informational and educational purposes only and should not be considered legal, tax, audit, accounting or regulatory advice.

The applicability of GST audit, special audit, departmental audit, GSTR-9C, Companies Act restrictions and professional-independence requirements depends upon the facts of the particular case, applicable financial year, statutory provisions, rules, notifications and professional requirements in force at the relevant time.

Businesses and professionals should review the precise scope of any proposed engagement and applicable independence requirements before appointing an existing statutory auditor for additional GST-related work.

Professional advice should be obtained after considering the specific facts, records and circumstances of each case.