GST Audit Services in India

GST Audit Services in India

EzyBiz India Consulting LLP provides professional GST Audit Services in India to Indian companies, multinational companies, foreign-owned businesses, exporters, service providers and other registered taxpayers.

GST audit and departmental verification can involve detailed examination of GST returns, books of account, input tax credit, turnover, tax payments, classification, place of supply, reverse charge transactions and reconciliations with financial statements.

Our team assists businesses in preparing for GST departmental audits, conducting internal GST compliance reviews, identifying potential exposures and responding to observations raised by GST authorities.

Businesses looking for broader GST advisory, compliance and litigation assistance may also refer to our GST & Indirect Tax Advisory Services in India.

What is GST Audit?

Under GST, an audit generally involves examination of records, returns and other documents maintained or furnished by a registered person to verify the correctness of:

• turnover declared;
• taxes paid;
• refund claimed;
• input tax credit availed and utilised; and
• compliance with provisions of GST law.

Section 2(13) of the CGST Act defines the term “audit”.

The present GST framework primarily provides for departmental audit under Section 65 of the CGST Act and special audit under Section 66 of the CGST Act.

The earlier requirement under which specified taxpayers were required to get their GST accounts audited by a Chartered Accountant or Cost Accountant based on turnover has been discontinued.

Accordingly, GST audit today should not be confused with the earlier mandatory turnover-based GST audit regime.

The current statutory provisions relating to GST audit can be referred to on the CBIC GST website.

Types of GST Audit

Audit by GST Authorities under Section 65

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

The audit may be conducted:

• at the taxpayer’s place of business; or
• at the office of the GST authorities.

The registered person is generally required to be informed by notice before commencement of the audit.

During such audit, the authorities may examine GST returns, financial records, tax payments, input tax credit, supporting documents and other relevant records.

You may also read our detailed guide on Functions of GST Audit Commissionerate.

Special Audit under Section 66

A Special Audit may be directed in specified circumstances where the proper officer considers that:

• the value has not been correctly declared; or
• input tax credit availed is not within the normal limits,

having regard to the nature and complexity of the case and the interest of revenue.

Such audit is conducted by a Chartered Accountant or Cost Accountant nominated by the Commissioner.

The special audit is therefore different from a normal internal GST compliance review or departmental audit under Section 65.

For statutory provisions, taxpayers may refer to the Central Goods and Services Tax Act.

Is GST Audit Mandatory Based on Turnover?

No. The earlier provision requiring certain registered persons to get their accounts audited by a Chartered Accountant or Cost Accountant based upon the prescribed turnover threshold has been removed.

Therefore, merely crossing a particular turnover threshold does not presently create a requirement for the old-style mandatory GST audit by a CA or Cost Accountant.

However, businesses may still be subject to:

• departmental audit under Section 65;
• special audit under Section 66;
• annual return requirements;
• GSTR-9C reconciliation requirements, wherever applicable;
• GST scrutiny;
• investigation;
• show cause proceedings; and
• other compliance verification.

Businesses should therefore distinguish between statutory GST audit by tax authorities and a voluntary GST compliance review undertaken as a risk-management exercise.

GST Annual Return and GSTR-9C

The discontinuation of the earlier CA-certified GST audit should also not be confused with annual return and reconciliation requirements.

Form GSTR-9 is the annual return applicable to prescribed registered taxpayers.

Where applicable under the prevailing provisions, taxpayers may also be required to furnish Form GSTR-9C as a self-certified reconciliation statement.

GSTR-9C is no longer the earlier auditor-certified reconciliation statement.

Businesses should check the applicability for the relevant financial year based on the provisions and notifications applicable to them.

The official filing procedure and annual return guidance can be accessed through the GST Portal.

Why GST Audit Preparation is Important

A departmental GST audit can involve examination of transactions and records covering one or more financial years.

Any difference between books of account, GST returns and supporting documentation can result in questions from GST authorities.

A detailed GST compliance review before or during an audit can help identify such differences at an early stage.

Common areas of examination include:

• turnover reconciliation;
• GSTR-1 and GSTR-3B differences;
• input tax credit;
• GSTR-2B reconciliation;
• reverse charge liability;
• classification of goods and services;
• HSN and SAC codes;
• applicable GST rate;
• place of supply;
• exports and zero-rated supplies;
• exempt supplies;
• credit notes and debit notes;
• advances;
• related-party transactions;
• branch transfers;
• job work transactions;
• imports;
• e-way bills;
• annual returns; and
• financial statement reconciliation.

Areas Covered Under Our GST Audit Services

Our GST audit and compliance review generally covers the following areas depending upon the nature of the business and scope of engagement.

GST Registration Review

We review whether:

• appropriate GST registrations have been obtained;
• all relevant places of business have been disclosed;
• registration particulars are correctly reflected;
• amendments required in GST registration have been carried out; and
• registrations across different States are appropriately maintained.

For registration-related assistance, refer to our GST Registration Procedure Guide.

Review of Outward Supplies

We examine whether outward supplies recorded in the books are properly reported in GST returns.

The review may include:

• taxable supplies;
• exempt supplies;
• zero-rated supplies;
• exports;
• inter-State supplies;
• intra-State supplies;
• branch transfers;
• related-party transactions;
• debit notes;
• credit notes; and
• advances, wherever applicable.

GSTR-1 and GSTR-3B Reconciliation

A significant part of GST audit preparation involves reconciliation between returns and books of account.

We review differences between:

• sales as per books and GSTR-1;
• liability reported in GSTR-1 and GSTR-3B;
• financial statements and GST returns;
• credit notes and debit notes appearing in books and returns; and
• taxable, exempt and zero-rated turnover.

Unreconciled differences may result in departmental queries and therefore require proper documentation and explanation.

Input Tax Credit Review

Input tax credit is one of the most important areas examined during GST audit and departmental proceedings.

Our review generally covers:

• eligibility of ITC;
• availability of supporting tax invoices;
• business use of goods and services;
• blocked credits under Section 17(5);
• GSTR-2B reconciliation;
• reversals required under GST law;
• reverse charge transactions;
• credit relating to capital goods;
• ITC relating to exempt and taxable supplies; and
• other conditions prescribed under Section 16.

Any material mismatch is analysed and appropriate corrective action is considered based upon applicable law.

GSTR-2B and Purchase Register Reconciliation

We reconcile input tax credit appearing in the books with credits reflected in GSTR-2B.

The review helps identify:

• invoices missing from GSTR-2B;
• duplicate credits;
• excess ITC claims;
• incorrect GSTIN;
• wrong tax period;
• vendor compliance issues;
• credit notes not accounted for; and
• ITC requiring reversal.

A regular reconciliation process can significantly reduce GST exposure during departmental audit.

Reverse Charge Mechanism Review

We examine transactions potentially covered under Reverse Charge Mechanism and determine whether:

• GST liability has been correctly identified;
• tax has been discharged within the applicable period;
• documentation has been maintained;
• eligible ITC has been subsequently claimed; and
• transactions have been correctly reported in GST returns.

HSN, SAC and GST Rate Review

Incorrect classification of goods or services can result in short payment or excess payment of GST.

Our GST audit review may therefore examine:

• HSN classification of goods;
• SAC classification of services;
• applicable GST rate;
• exemption notifications;
• concessional rates;
• composite and mixed supplies; and
• changes in tax rates during the relevant period.

Place of Supply Review

Place-of-supply provisions determine whether CGST/SGST or IGST should be charged.

We review significant transactions to determine whether the applicable place-of-supply provisions have been correctly applied, particularly for:

• inter-State services;
• export of services;
• import of services;
• services to foreign customers;
• intermediary arrangements;
• installation services;
• performance-based services; and
• transactions involving multiple States.

Export and Zero-Rated Supply Review

For exporters and businesses providing services outside India, GST audit may involve detailed verification of export and zero-rated transactions.

We review:

• export invoices;
• Letter of Undertaking, where applicable;
• payment of IGST on exports;
• foreign inward remittances;
• conditions for export of services;
• shipping documents;
• refund claims; and
• reconciliation of export turnover with GST returns.

Businesses requiring assistance with refund claims can refer to our GST Refund Services in India.

Import Transactions

For import transactions, our GST compliance review may cover:

• bills of entry;
• IGST paid on imports;
• ITC claimed in GST returns;
• import of services;
• reverse charge liability;
• customs records; and
• reconciliation with financial statements.

E-Way Bill Compliance

Depending upon the business, e-way bill records may also be examined during GST audit.

We review whether e-way bills have been generated wherever required and whether the details agree with:

• tax invoices;
• delivery challans;
• GST returns; and
• books of account.

For further information, refer to our guide on E-Way Bill under GST.

Reconciliation with Financial Statements

One of the key areas in GST audit is reconciliation of GST returns with audited or final financial statements.

The exercise can involve reconciliation of:

• turnover;
• other operating income;
• advances;
• miscellaneous income;
• purchases;
• expenses;
• fixed assets;
• GST liability;
• input tax credit;
• exports; and
• branch transactions.

Differences are documented together with appropriate explanations and supporting evidence.

Documents Commonly Required for GST Audit

Depending upon the nature of audit and business, the following documents may be required:

• GST registration certificate;
• GSTR-1 returns;
• GSTR-3B returns;
• annual return in GSTR-9, where applicable;
• GSTR-9C, where applicable;
• electronic credit ledger;
• electronic cash ledger;
• trial balance;
• general ledger;
• sales register;
• purchase register;
• expense ledgers;
• audited financial statements;
• tax invoices;
• debit notes;
• credit notes;
• bank statements;
• fixed asset register;
• input tax credit reconciliation;
• GSTR-2B records;
• export invoices;
• shipping bills;
• bills of entry;
• LUT records;
• refund applications;
• e-way bills;
• job-work records;
• agreements and contracts; and
• other supporting documents relevant to major transactions.

The actual list depends upon the nature and scope of the audit.

GST Audit Checklist

A structured GST audit checklist helps businesses identify gaps before records are examined by GST authorities.

Typical checklist areas include:

• GST registration;
• return filing;
• turnover reconciliation;
• tax rate;
• HSN/SAC classification;
• input tax credit;
• GSTR-2B;
• reverse charge;
• place of supply;
• exports;
• imports;
• related-party transactions;
• credit notes;
• debit notes;
• e-way bills;
• job work;
• annual returns; and
• financial statement reconciliation.

You can also refer to our detailed GST Audit Checklist.

Process of GST Departmental Audit

A departmental audit under Section 65 generally involves the following stages.

Issue of Audit Notice

The registered person may receive an audit notice from the GST authorities specifying the period and records required.

Preparation and Submission of Information

The taxpayer is required to compile the relevant returns, books, reconciliations and supporting records.

Examination by GST Authorities

The authorities examine the records and may seek explanations regarding discrepancies or specific transactions.

Audit Observations

Where differences or issues are identified, the taxpayer may be asked to provide clarification, reconciliation and supporting documents.

Reply to Audit Observations

A detailed factual and legal response should be prepared for the observations raised.

Communication of Audit Findings

On completion of an audit under Section 65, the findings are communicated to the registered person in accordance with applicable GST provisions.

Where the audit results in further proceedings, businesses may require assistance in responding to notices or demands.

Our broader GST & Indirect Tax Advisory and Litigation Services cover GST notices, assessments and appellate proceedings.

How EzyBiz Assists During GST Departmental Audit

EzyBiz India Consulting LLP assists businesses throughout the GST audit process.

Our assistance may include:

• review of GST audit notice;
• identification of information requested;
• preparation of document checklist;
• GST return reconciliation;
• turnover reconciliation;
• input tax credit reconciliation;
• GSTR-2B review;
• review of RCM transactions;
• analysis of classification and GST rates;
• review of exports and imports;
• financial statement reconciliation;
• preparation of explanations;
• preparation of supporting workings;
• assistance in responding to audit observations; and
• representation support during departmental proceedings.

Internal GST Compliance Review

Businesses do not necessarily need to wait for a departmental audit before conducting a GST review.

A voluntary internal GST compliance review can help identify:

• tax shortfalls;
• excess input tax credit;
• reconciliation differences;
• incorrect classifications;
• place-of-supply errors;
• RCM exposures;
• documentation gaps;
• vendor-related ITC issues; and
• return filing inconsistencies.

Corrective action can then be considered before the matter is identified during departmental scrutiny or audit.

GST Audit Services for Multinational and Foreign-Owned Companies

Foreign-owned companies operating in India may encounter additional GST complexities because their business transactions frequently involve cross-border services, imports, exports and related-party arrangements.

Our review may cover:

• cross-border service transactions;
• import of services;
• export of services;
• related-party supplies;
• intercompany charges;
• reimbursement of expenses;
• transfer pricing-related invoices from a GST perspective;
• foreign currency receipts;
• place of supply;
• reverse charge; and
• input tax credit.

Foreign businesses entering India may also refer to our India Market Entry Consulting Services and Foreign Company Registration in India.

Why Choose EzyBiz for GST Audit Services?

EzyBiz India Consulting LLP is an integrated professional advisory firm supporting Indian and international businesses with taxation, regulatory compliance, India entry and related advisory services.

Our GST audit approach focuses on identifying material issues before they become disputes and preparing practical reconciliations and documentation that can withstand departmental examination.

Our GST services cover:

• GST advisory;
• GST compliance review;
• departmental audit;
• GST refunds;
• GST notices;
• assessments;
• appeals; and
• litigation support.

For broader tax and regulatory services, refer to our Tax and Regulatory Advisory Services in India.

Frequently Asked Questions on GST Audit

Is GST audit mandatory for businesses having turnover above ₹2 crore?

No. The earlier requirement for specified taxpayers to have their GST accounts audited by a Chartered Accountant or Cost Accountant based upon turnover has been discontinued.

However, GST authorities may conduct departmental audit under Section 65, and a special audit may be ordered under Section 66 in appropriate cases.

Who conducts GST audit under Section 65?

GST audit under Section 65 is conducted by the Commissioner or an officer authorised by the Commissioner.

What is a Special Audit under GST?

Special Audit is provided under Section 66 of the CGST Act. In specified circumstances, the proper officer may direct that the taxpayer’s records be audited by a Chartered Accountant or Cost Accountant nominated by the Commissioner.

Is GSTR-9C still required?

GSTR-9C continues as a reconciliation statement for taxpayers to whom the applicable requirement applies. Under the current framework, it is a self-certified reconciliation statement, rather than the earlier auditor-certified statement.

What records are checked during GST audit?

GST authorities may examine books of account, GST returns, invoices, input tax credit records, financial statements, e-way bills, export/import records, tax payments and other documents relevant to determining GST compliance.

Can a taxpayer conduct a GST review before receiving an audit notice?

Yes. Businesses may undertake an internal GST compliance review to identify discrepancies in turnover, ITC, GST returns, classification, RCM, place of supply and other areas before departmental proceedings arise.

What is the difference between GST audit and GST assessment?

GST audit primarily involves examination of records and compliance. Assessment or adjudication may involve determination of tax liability and can arise separately or following identification of discrepancies.

Can EzyBiz assist in replying to GST audit observations?

Yes. We assist with reconciliation, preparation of supporting documents, analysis of GST issues and preparation of responses to departmental audit observations.

Related Services

Businesses requiring assistance beyond GST audit may also explore our related tax and regulatory services:

• GST & Indirect Tax Advisory and Litigation Services – Comprehensive GST advisory, compliance, departmental proceedings, assessments, refunds and litigation support.
• GST Registration Services – Assistance with GST registration, amendments and related registration compliance.
• GST Refund Services in India – Professional assistance with preparation, filing, documentation and follow-up of GST refund claims.
• GST Audit Checklist – Practical checklist covering records, returns, reconciliations, input tax credit and other important audit areas.
• Functions of GST Audit Commissionerate – Guidance on departmental GST audit and functions performed by GST audit authorities.
• E-Way Bill under GST – Guidance on applicability, generation and compliance requirements relating to e-way bills.
• Tax and Regulatory Advisory Services in India – Integrated tax, GST, regulatory, assessment and litigation support for Indian and foreign-owned businesses.

Need Professional GST Audit Assistance?

Whether your business has received a departmental GST audit notice or wishes to undertake a preventive GST compliance review, our team can assist with reconciliations, document review, GST exposure analysis, replies to audit observations and representation before the authorities.

Prepared By:
EzyBiz India Consulting LLP

Last Updated: August 2026

Disclaimer:
This page provides general information on GST audit and compliance matters and should not be treated as legal or tax advice. GST provisions, rules, notifications and judicial interpretations may change from time to time. Professional advice should be obtained based on the facts and circumstances of each case.