Masters India

Inspection Process under GST

Prakash Matre
Prakash Matre at March 20, 2023

Know About Inspection Process

In this article we will discuss the inspection process under GST:

What is the circumstance when the inspection takes place under GST?

Under GST, a joint commissioner or an officer of higher rank can carry out GST inspection procedure if he/she has reason to believe that the taxpayer has done the following thing to evade tax:

  1. Hidden any transaction of supply
  2. Hidden stock in hand
  3. Availed ITC (Input Tax Credit) in excess
  4. Contravened any of the GST provisions
  5. Maintaining books of account to evade tax
  6. Any warehouse operator or transporter hiding goods without paying GST on them
In such a case the joint commissioner or any other officer of higher rank can authorize any person to inspect places of businesses of through furnishing FORM GST INS-01:
  1. the taxpayer or
  2. Warehouse operator or
  3. the transporter
The officer can also inspect any other place if he/she deems fit.

Understanding the ‘Reasons to believe’ statement for Inspection!

Reason to believe for the GST inspection procedure means having factual knowledge of something (does not include direct knowledge) through which a reasonable person may reasonably conclude something. According to the Indian Penal Code (IPC); “A person is said to have ‘reason to believe’ something if he has adequate grounds to believe that thing.” In simple words, the reason to believe is purely determined by the person through examination and evaluation of fact that does not include his/her opinion.


Do an officer needs to mention a reason to believe in writing before issuing an inspection order?

No, there is no such provision under the GST Act that says the officer needs to state the reason to believe before issuing any order. The amendment  Section 132(1) & (1A) of Income Tax Act also states that the person needs not to mention the reason to believe to any person or the Appellate Authority or any other authority.

We often get confused with the word inspection and search under GST due to which we use these words interchangeably. However, there is a fine line between these two words; let us see how these two words distinct from each other:

Search under GST Inspection under GST
Search is an attempt made by the government official either by a tax officer or police officer as the case may to examine a person, place, object, and so forth so as to find evidence of a crime. The search under GST can only be carried out under the valid authority of law. On the other hand Inspection under GST is a softer provision that permits the officer to access any place of business of the following persons
  1. A taxpayer
  2. A transporter
  3. A warehouse operator or owner

Who and when can order search under GST?

The joint commissioner or any other higher rank officer can order search inspection under GST or if he/she has a “reasons to believe”. The order can be passed under GST when:

  1. Goods that need to be confiscated
  2. Any books of accounts or documents that are hidden which can be useful for proceedings
Moreover, in such a case the joint commissioner or any other officer of higher rank can authorize any person to search and seize the goods.
Rate your experience
4.40 / 5. Vote count: 175
Use GST API to build your own GST compliance application.

Check out other Similar Posts

No Data found
No Blogs to show
Need Help in Getting Started?
Make smart decision to replace your manual work with modern solution and improve your business output
Request Callback
Continue Browsing
Subscribe Now!
Receive GST, E way bill, e-Invoice, Accounts payable and OCR updates from our experts.
Chat with us

😄Hello. Welcome to Masters India! I'm here to answer any questions you might have about Masters India Products & APIs. What brings you to our website today?

Looking for

GST Software

E-Way Bill Software

E-Invoice Software

BOE TO Excel Conversion

Accounts Payable Software

Invoice OCR Software/APIs


GST Verification API

E-Way Bill API

E-Invoicing API

KSA E-Invoice APIs

Vehicle tracking

Vendor Verification API

Other Requirement