Section 65 of CGST Act - Audit by Tax Authorities
Updated: 15 September 2026
Section 65 of the Central Goods and Services Tax Act, 2017 governs a departmental GST audit conducted by the Commissioner or an officer authorised by the Commissioner. The provision specifies who may be audited, where the audit may take place, advance notice, the completion period, taxpayer cooperation, communication of findings and the action that may follow an audit.
- Audit may be undertaken for any registered person by the Commissioner or an authorised officer.
- At least 15 working days' prior notice is required.
- Rule 101 prescribes the audit procedure and Forms GST ADT-01 and GST ADT-02.
- The normal completion period is 3 months from commencement of audit, extendable by up to a further 6 months for reasons recorded in writing.
- Audit findings must be communicated within 30 days after conclusion of the audit.
- Section 65(7), as amended with effect from 1 November 2024, also refers to Section 74A.
Meaning of "Audit" under the CGST Act
Section 2(13) defines "audit" as examination of records, returns and other documents maintained or furnished by the registered person under the CGST Act, the rules or any other law for the time being in force. Its purpose is to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess compliance with the Act and the rules.
For the official statutory material, see the CBIC Tax Information Portal - CGST Act.
Text and Explanation of Section 65
Section 65(1) - Power to undertake audit. The Commissioner, or an officer authorised by the Commissioner through a general or specific order, may undertake audit of any registered person for the prescribed period, frequency and manner.
Section 65(2) - Place of audit. The audit may be conducted at the registered person's place of business or at the office of the tax authorities.
Section 65(3) - Prior notice. The registered person must be informed by notice at least 15 working days before the audit is conducted. Under Rule 101, the notice is issued in FORM GST ADT-01.
Section 65(4) - Time limit. The audit must ordinarily be completed within 3 months from the date of commencement of audit. If the Commissioner is satisfied that it cannot be completed within that period, the Commissioner may, for reasons recorded in writing, extend it by a further period not exceeding 6 months.
Commencement of audit. For Section 65(4), commencement means the date on which the records and other documents called for are made available by the registered person or the date of actual institution of audit at the place of business, whichever is later.
Section 65(5) - Facilities, information and assistance. The authorised officer may require the registered person to provide facilities for verification of books and documents, furnish information and render assistance for timely completion of the audit.
Section 65(6) - Communication of findings. Within 30 days after conclusion of audit, the proper officer must inform the registered person of the findings, rights and obligations and the reasons for the findings. Rule 101 prescribes FORM GST ADT-02 for communication of audit findings.
Section 65(7) - Further proceedings. If audit detects tax not paid or short paid, tax erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under Section 73, Section 74 or Section 74A, as applicable. The reference to Section 74A was inserted with effect from 1 November 2024.
Rule 101 of the CGST Rules - Departmental Audit Procedure
Rule 101 of the CGST Rules, 2017 supplements Section 65. In practical terms, the rule provides the following framework:
- The audit period may cover a financial year or part thereof, or multiples thereof.
- The proper officer issues FORM GST ADT-01 for an audit under Section 65.
- The audit officer verifies the underlying documents, books, returns and statements, including turnover, exemptions, deductions, tax rates, input tax credit, refunds and other relevant matters.
- Discrepancies noticed during audit may be communicated to the registered person, who may furnish a reply. The officer finalises findings after considering that reply.
- At the conclusion of audit, findings are communicated in FORM GST ADT-02.
GST Audit Notice and Forms
| Stage | Requirement | Form / Time |
|---|---|---|
| Audit initiation | Prior notice to the registered person | GST ADT-01; not less than 15 working days before audit |
| Audit completion | Complete audit from statutory commencement date | Normally 3 months; extension up to a further 6 months |
| Audit findings | Inform findings, rights, obligations and reasons | GST ADT-02; within 30 days after conclusion |
| Tax discrepancy | Demand proceedings may be initiated where legally applicable | Section 73, Section 74 or Section 74A |
The official formats of GST audit forms ADT-01 to ADT-04 are available from CBIC.
Section 73, Section 74 and Section 74A after Audit
Audit findings do not by themselves replace the statutory demand process. Where the conditions in Section 65(7) are met, the proper officer may initiate the applicable determination proceedings. For periods up to FY 2023-24, Sections 73 and 74 continue to be relevant according to the nature of the case. Section 74A provides the determination framework for FY 2024-25 onward.
Documents Commonly Examined During a Section 65 Audit
Rule 101 authorises verification of the records and documents supporting the books, returns and statements. Depending on the business and issues involved, the audit may examine records relevant to turnover, outward and inward supplies, tax rates, exemptions, deductions, input tax credit, refunds and other compliance matters. The exact documents required should be read with the audit notice and the statutory record-keeping requirements applicable to the registered person.
Rights and Obligations of the Registered Person
The registered person is required to provide access to books and other required documents, furnish information and assist in timely completion of the audit. At the same time, Section 65 and Rule 101 provide procedural safeguards: advance notice, a defined audit-completion period, consideration of the taxpayer's reply to discrepancies, and a reasoned communication of final findings.
Section 65 Audit vs Section 66 Special Audit
A departmental audit under Section 65 is conducted by the tax authorities. A special audit under Section 66 is a distinct mechanism under which, subject to the statutory conditions and prior approval, records may be examined and audited by a chartered accountant or cost accountant nominated by the Commissioner.
Practical Compliance Checklist
- Verify the audit period, GSTIN, place and date stated in GST ADT-01.
- Confirm that the statutory notice period has been provided.
- Identify the records specifically called for and keep reconciliations ready.
- Reconcile returns, books, turnover, tax paid, input tax credit and refunds for the audit period.
- Respond factually to discrepancies and preserve proof of submissions.
- Check the audit commencement date because it governs the completion period under Section 65(4).
- Review GST ADT-02 carefully and distinguish audit findings from any subsequent statutory demand notice.
Note: This page is a general legal information article. GST provisions, notifications, circulars and procedures should be checked against the latest official text for the relevant tax period and facts.