GST Audit Services in India

EzyBiz India Consulting LLP provides professional GST Audit Services in India for Indian companies, foreign-owned subsidiaries, multinational groups, manufacturers, exporters, service providers, trading companies and other GST-registered businesses.

Our Chartered Accountant-led team assists taxpayers with GST departmental audits under Section 65, GST ADT-01 notices, special audit proceedings under Section 66, internal GST compliance reviews, input tax credit verification, GST return reconciliations, replies to audit observations and representation support before GST authorities.

A GST audit may involve examination of sales, purchases, books of account, financial statements, GST returns, input tax credit, reverse charge, classification, tax rates, exports, imports, refunds and other statutory records. Our approach focuses on identifying potential exposure, preparing documentary evidence and presenting a well-supported tax position.

Received a GST audit notice? Contact our team at +91 98992 17778, email anil@ezybizindia.in or WhatsApp our GST experts.

For registration, returns, refunds and broader GST advisory services, explore our GST and Indirect Tax Advisory Services in India.

GST Audit Services in India – Overview

What Is GST Audit?

Section 2(13) of the Central Goods and Services Tax Act, 2017 defines audit as examination of records, returns and other documents maintained or furnished by a registered person to verify the correctness of turnover declared, taxes paid, refunds claimed, input tax credit availed and compliance with GST law.

A GST audit may involve detailed verification of books of account, statutory returns, invoices, financial statements and transaction-level documentation.

Is GST Audit Mandatory in India?

The earlier requirement for specified taxpayers to obtain a turnover-based GST audit from a Chartered Accountant or Cost Accountant under Section 35(5) has been discontinued with effect from 1 August 2021.

Accordingly, businesses are no longer required to obtain the former mandatory CA-certified GST audit merely because their turnover exceeds ₹2 crore or another historical threshold.

However, departmental audits under Section 65 and special audits under Section 66 remain applicable. Separately, eligible taxpayers must comply with GSTR-9 and self-certified GSTR-9C requirements.

Who Needs Professional GST Audit Assistance?

Professional GST audit assistance may be useful for businesses that:

• Have received FORM GST ADT-01
• Are undergoing a departmental GST audit
• Have been directed to undergo a special audit
• Have differences between books and GST returns
• Have significant input tax credit claims
• Operate in multiple States
• Have substantial exports or GST refunds
• Have complex intercompany transactions
• Wish to undertake a preventive GST compliance review

Types of GST Audit under the CGST Act

Departmental GST Audit under Section 65

Section 65 of the CGST Act empowers the Commissioner or an officer authorised by the Commissioner to conduct 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.

It generally involves examination of records and returns for the period specified in the audit proceedings.

Special GST Audit under Section 66

Section 66 provides for a special audit in specified circumstances involving issues such as complexity, valuation or input tax credit.

A special audit is performed by a Chartered Accountant or Cost Accountant nominated by the Commissioner after the applicable statutory approval and direction.

It is distinct from both departmental audit under Section 65 and an independently commissioned GST compliance review.

Voluntary GST Compliance Audit

A business may voluntarily engage a professional to undertake an internal GST health check, return reconciliation or transaction-based compliance review.

Such a review is not the statutory departmental audit under Section 65, nor the special audit under Section 66.

A voluntary review can help identify discrepancies before they become the subject of notices, assessments or litigation.

GST Departmental Audit under Section 65

Who Can Conduct a Departmental GST Audit?

A departmental GST audit is undertaken by the Commissioner or an authorised GST officer in accordance with Section 65 and Rule 101 of the CGST Rules.

The authorities may examine records, returns, transaction details and other information relevant to verifying compliance.

GST ADT-01 Notice and Prior Intimation

Under Section 65, the registered person must be informed through the prescribed notice at least 15 working days before the conduct of the audit.

FORM GST ADT-01 is used for communicating the departmental audit notice.

The taxpayer should carefully examine the audit period, location, records requested and other instructions contained in the notice.

Time Limit for Completing GST Departmental Audit

A departmental audit under Section 65 is ordinarily required to be completed within three months from commencement of the audit.

The Commissioner may extend this period by a further period not exceeding six months, where satisfied that additional time is required and reasons are recorded in writing.

The statutory meaning of commencement and the relevant procedural requirements must be considered when evaluating an audit timeline.

GST ADT-01 Audit Notice – How to Respond

Reviewing the GST Audit Notice

After receiving an ADT-01 notice, a taxpayer should identify:

• Issuing GST authority
• GSTIN and registered person
• Financial years or tax periods covered
• Date and location of audit
• Books and records requested
• Details of the authorised officer
• Relevant submission and attendance requirements

Preparing Documents for GST Audit

Our team assists businesses in compiling documents, organising transaction records, preparing GST reconciliations and identifying material differences before the audit begins.

Documents should be complete, internally consistent and supported by accounting records and relevant contractual or transaction evidence.

Representation and Explanation before GST Authorities

During the audit, the authorities may request explanations concerning turnover, tax payments, input tax credit, exemptions, classification, reverse charge or other matters.

We assist with factual and legal submissions, reconciliation statements, supporting schedules and professional representation within the scope permitted by law.

Special GST Audit under Section 66

When Can a Special Audit Be Ordered?

Section 66 permits a special audit where the statutory conditions are satisfied, including concerns about the correctness of declared value or input tax credit availed, having regard to the nature and complexity of the case and interest of revenue.

The proper officer must obtain the required prior approval before issuing the direction.

FORM GST ADT-03 and ADT-04

FORM GST ADT-03 is used for the direction to undertake a special audit.

FORM GST ADT-04 is associated with communication of findings in accordance with the prescribed special audit procedure.

A special audit is conducted by the Chartered Accountant or Cost Accountant nominated by the Commissioner, not simply by a professional selected by the taxpayer.

How EzyBiz Assists during Special Audit

EzyBiz India can assist taxpayers in reviewing the special audit direction, compiling relevant records, reconciling the underlying transactions and preparing supporting explanations.

We may also assist in evaluating the findings and preparing responses or further submissions where necessary.

Scope of GST Audit Services Offered by EzyBiz India

GST Audit Preparation and Documentation

Our GST audit assistance may include:

• Review of ADT-01 notices
• Identification of the audit period and issues
• Preparation of GST audit document checklists
• Compilation of accounting records
• Preparation of financial-statement reconciliations
• Verification of GST returns and electronic ledgers
• Review of supporting invoices and contracts
• Preparation of schedules and explanations

GST Compliance and Transaction Review

We examine relevant transactions to identify potential GST exposure arising from classification, tax rates, place of supply, reverse charge, input tax credit, exports, refunds and other statutory provisions.

The exact scope depends on the taxpayer’s business activities, audit notice and available documentation.

Reply to GST Audit Observations

Where the department identifies differences or raises objections, our team assists in analysing the observations and preparing supporting factual and legal submissions.

If the matter develops into a show cause notice, tax demand or appeal, businesses may use our GST Assessment and Litigation Services in India.

GST Turnover and Books of Account Reconciliation

Financial Statements versus GST Returns

GST authorities may compare turnover reflected in audited financial statements or books of account with turnover declared in GST returns.

The reconciliation may examine:

• Revenue from operations
• Other operating income
• Miscellaneous income
• Taxable outward supplies
• Exempt and nil-rated supplies
• Export and SEZ supplies
• Advances and adjustments
• Debit notes and credit notes
• Inter-branch supplies
• Related-party supplies

Reconciliation of Sales Register and GSTR-1

Our team reviews the sales register, invoice records, credit notes and debit notes against GSTR-1 and applicable amendments.

Material differences should be identified and supported by explanations covering timing, valuation, classification or reporting errors.

Reconciliation of GSTR-1 and GSTR-3B

Differences between outward supplies reported in GSTR-1 and corresponding tax liability in GSTR-3B may result in departmental questions.

We analyse mismatches and prepare a period-wise reconciliation.

For ongoing compliance assistance, visit our GST Return Filing Services in India.

GST Input Tax Credit Audit and Reconciliation

Input Tax Credit Eligibility under Section 16

Input tax credit eligibility is governed by Section 16 of the CGST Act and other relevant provisions, rules and notifications.

The review may involve checking tax invoices, receipt of goods or services, supplier reporting, return filing, payment requirements and statutory restrictions.

Blocked Credits under Section 17(5)

Certain categories of goods and services are subject to blocked ITC restrictions, subject to the statutory exceptions.

The audit review may include motor vehicles, food and beverages, personal consumption, works contracts, construction-related expenditure and other restricted categories.

Each transaction should be assessed against the precise provision applicable to its facts.

ITC Reversal and Reclaim Review

We examine ITC reversals, reclaims, exempt-supply apportionment, blocked credits, supplier-related issues and credit ledger balances.

A documented reversal and reclaim register improves the audit trail and helps reconcile GSTR-3B with the accounting records.

GSTR-2B and Purchase Register Reconciliation

Identifying Missing and Excess ITC

The purchase register should be reconciled against GSTR-2B and other relevant data sources.

The review can identify:

• Invoices recorded in books but missing from GSTR-2B
• Invoices appearing in GSTR-2B but absent from books
• Incorrect supplier GSTINs
• Duplicate credit claims
• Tax amount mismatches
• Credit note differences
• Wrong tax periods
• Potentially ineligible credits

Supplier Compliance and Invoice Mismatches

Supplier reporting differences may affect input tax credit eligibility or timing.

Our audit support includes reviewing supplier invoice records, return-period differences, purchase accounting and related documentary evidence.

IMS and GSTR-2B Audit Controls

Where relevant, the Invoice Management System should be reviewed together with GSTR-2B, purchase records and GSTR-3B.

Businesses should document treatment of accepted, rejected, pending and amended supplier documents according to the applicable portal procedures.

GST Reverse Charge Mechanism Audit

Identifying Transactions Liable to Reverse Charge

During a GST audit, transactions covered by the Reverse Charge Mechanism may require separate verification.

Common areas may include notified domestic services, import of services and other specified supplies.

The liability must be assessed according to the relevant notification and statutory provisions rather than assuming all purchases from unregistered suppliers attract reverse charge.

RCM Payment and Reporting Reconciliation

The review should reconcile reverse-charge transactions with tax payments, GSTR-3B, self-invoices where applicable and input tax credit claims.

Reverse-charge tax must be discharged through the prescribed mechanism, and associated ITC may be claimed only where the statutory conditions are satisfied.

GST Classification, HSN, SAC and Tax Rate Audit

HSN and SAC Classification Review

Incorrect classification may result in short payment or excess payment of GST, disputed exemptions or incorrect invoicing.

Our review considers the nature of goods or services, relevant classification entries, applicable notifications and supporting transaction documentation.

GST Rate and Exemption Review

GST rates and exemptions should be checked against notifications effective during the relevant period.

Composite and mixed supply issues, concessional rates and classification disputes may require separate legal examination.

For broader GST rate-related guidance, refer to our Indirect Tax Advisory Services.

Place of Supply and Cross-Border GST Audit

Inter-State and Intra-State Supply Review

The place-of-supply provisions determine whether a transaction attracts IGST or CGST and SGST, subject to the nature of supply.

Incorrect determination may result in tax-head differences, interest issues and refund implications.

Export and Import of Services

Cross-border services require examination of supplier and recipient locations, place of supply, export conditions, reverse charge and contractual arrangements.

Foreign-currency invoicing alone does not establish that a supply qualifies as an export of services.

GST Audit of Exports, SEZ and Refund Claims

Export Transactions and Zero-Rated Supplies

GST audit may involve verification of export invoices, shipping documentation, LUT records, GST returns, banking evidence and zero-rated supply conditions.

Export turnover and relevant tax or refund claims should be reconciled with the books of account.

Review of GST Refund Claims

Refund applications may be examined for eligibility, computation, input tax credit, declarations and supporting evidence.

Businesses requiring assistance with RFD-01 applications or refund disputes can explore our GST Refund Services in India.

GST Audit of E-Way Bills, E-Invoices and Inventory

Reconciliation of E-Way Bills with GST Turnover

Where applicable, e-way bill data may be compared with sales invoices, delivery challans, stock movement records and GST returns.

Differences may arise from cancelled documents, job-work movements, stock transfers or reporting errors.

See our E-Way Bill under GST Guide.

E-Invoice and Stock Movement Verification

For taxpayers covered by e-invoicing requirements, the audit may examine Invoice Reference Numbers, reporting timelines, invoice particulars and consistency with GST returns.

Stock movement records should be reviewed in the context of the actual transaction, including branch transfers and job-work arrangements.

GST Audit Documents and Checklist

Documents Commonly Required during GST Audit

The documents requested depend on the period and scope of audit. A typical checklist may include:

• GST registration certificates
• GST ADT-01 and other notices
• GSTR-1 and GSTR-3B returns
• GSTR-2B statements
• GSTR-9 and GSTR-9C, where applicable
• Trial balances and general ledgers
• Financial statements
• Sales and purchase registers
• Tax invoices, debit notes and credit notes
• Electronic cash and credit ledgers
• ITC reconciliation and reversal registers
• Reverse-charge workings
• Fixed asset registers
• Contracts and agreements
• Export invoices and shipping documents
• Letters of Undertaking
• Bills of entry and Customs records
• E-way bills and e-invoice records
• Refund applications and related orders
• Other transaction-specific evidence

For a more detailed checklist, read our GST Audit Checklist and Accounts and Records under GST.

Preparing an Audit-Ready Reconciliation File

Our recommended audit file contains year-wise and return-period-wise reconciliations, supporting schedules, document references and explanations for material differences.

A well-organised audit file can help reduce repeated document requests and allow timely responses to departmental questions.

GST Audit Observations, ADT-02 and Further Proceedings

Reply to GST Audit Observations

During departmental audit proceedings, GST authorities may raise observations relating to turnover, tax liability, ITC, classification, refunds, e-way bills or other matters.

Taxpayers should review each observation against the relevant books, returns, supporting evidence and statutory provisions.

Our team assists in preparing reconciliation-based replies and supporting submissions.

GST ADT-02 and Demand Proceedings

On completion of a departmental audit under Section 65, the audit findings are communicated through FORM GST ADT-02 in the prescribed manner.

Where tax discrepancies remain unresolved, further proceedings may arise under the applicable demand provisions, including Sections 73, 74 or 74A, depending on the relevant period and circumstances.

An audit observation or ADT-02 finding should not automatically be equated with a final adjudicated tax demand.

For notice replies, assessments and appeals, visit our GST Assessment and Litigation Services.

GST Audit for Foreign-Owned and Multi-State Businesses

GST Audit of Foreign-Owned Indian Subsidiaries

Foreign-owned Indian companies may face additional GST complexities involving management fees, intercompany supplies, imported services, exports, related-party transactions and multiple registrations.

The audit review may also consider contracts, valuation, place of supply, reverse charge and the interaction of accounting and GST reporting.

For businesses establishing operations in India, see our India Market Entry Consulting Services.

Multi-State GST Audit and Reconciliation

Businesses with multiple GSTINs should review State-wise turnover, cross-charges, distinct-person supplies, common expenses, input service distributor arrangements and branch transactions.

Reconciliations should be prepared separately for relevant GST registrations and coordinated with PAN-level financial statements where appropriate.

Why Choose EzyBiz India for GST Audit Services?

Chartered Accountant-Led Audit Assistance

EzyBiz India Consulting LLP provides GST audit, compliance review and departmental proceeding assistance through a Chartered Accountant-led team experienced in taxation, accounting, regulatory compliance and advisory matters.

Our services combine financial-statement reconciliation, GST law review, transaction analysis and preparation of documentary submissions.

Engagement Scope and GST Audit Professional Fees

Our professional fees depend on the number of GST registrations, audit period, transaction volume, complexity of reconciliations, departmental notices, scope of representation and time required.

A limited GST health check, comprehensive multi-year audit and active departmental representation assignment may require different engagement scopes.

Contact our team for a quotation after reviewing your audit notice and records.

Frequently Asked Questions on GST Audit in India

Is GST Audit Mandatory above ₹2 Crore Turnover?

No. The earlier turnover-based mandatory audit by a Chartered Accountant or Cost Accountant under Section 35(5) was discontinued from 1 August 2021.

However, the department may conduct an audit under Section 65, and the special audit provisions of Section 66 continue to operate.

What Is the Difference between Section 65 and Section 66?

Section 65 deals with departmental audit conducted by authorised GST officers.

Section 66 provides for special audit by a Chartered Accountant or Cost Accountant nominated by the Commissioner in prescribed circumstances.

Is GSTR-9C Still Required?

Yes, for taxpayers who meet the applicable statutory conditions and turnover threshold, GSTR-9C continues as a self-certified reconciliation statement.

It is not the earlier mandatory auditor-certified GST audit report.

How Much Notice Is Required before a GST Audit?

For audit under Section 65, the registered person must be informed at least 15 working days before the conduct of the audit.

What Happens after Receiving GST ADT-01?

The taxpayer should examine the audit period, compile the requested documents, reconcile GST returns with books and financial statements, identify material differences and prepare supporting explanations.

Can GST Authorities Audit Earlier Financial Years?

A departmental audit may cover the period specified under the applicable statutory provisions and notice.

The taxpayer should review the stated audit period, applicable records and any relevant legal or procedural issues.

Can a Business Conduct a Preventive GST Audit?

Yes. Businesses may voluntarily commission a GST compliance review to identify discrepancies, strengthen internal controls and prepare for possible departmental scrutiny.

Can EzyBiz Assist with GST Audit Representation?

Yes. EzyBiz India assists with document preparation, GST reconciliations, review of audit observations, drafting of replies and representation support, subject to the scope of engagement and applicable professional requirements.

Need help with a GST audit or ADT-01 notice? Contact +91 98992 17778 or email anil@ezybizindia.in.

Related Services and Supporting GST Guides

• GST and Indirect Tax Advisory Services – Main Pillar
• GST Registration Services
• GST Return Filing Services
• GST Refund Services
• GST Assessment and Litigation Services
• GST Audit Checklist
• Can a Statutory Auditor Conduct GST Audit?
• Functions of GST Audit Commissionerate
• Accounts and Records under GST
• E-Way Bill under GST
• Accounting and Bookkeeping Services
• India Market Entry Consulting Services
• Tax and Regulatory Advisory Services

Official Regulatory References

• GST Portal – Government of India
• Central Board of Indirect Taxes and Customs
• CBIC Tax Information Portal – CGST Act, Sections 65 and 66
• CBIC Circular 246/03/2025-GST – GSTR-9C and Annual Returns
• GST Council
• India Code – Indian Legislation

Contact EzyBiz India Consulting LLP

306, 3rd Floor, Vishwa Sadan Building, District Centre, Janakpuri, New Delhi – 110058, India.

Mobile: +91 98992 17778

Email: anil@ezybizindia.in

WhatsApp: Contact Our GST Audit Team

Reviewed By: CA Anil Agrawal, Founder, EzyBiz India Consulting LLP.

Last Updated: October 2026.

Disclaimer: This article provides general information concerning GST audit, departmental proceedings and GST compliance in India. It does not constitute transaction-specific legal, tax or regulatory advice. Audit powers, notices, documentation, limitation periods, annual return obligations, GST forms and procedural requirements depend on the relevant statutory provisions and facts. GST legislation, notifications, circulars and judicial interpretations may change. Businesses should verify the law applicable to their circumstances and obtain professional advice before acting.