Section 65 of the GST Act empowers tax officers to undertake GST Audits. If the authorised officer believes that an audit is necessary for any taxpayer, he/she has the authority to issue a notice in FORM-GST-ADT-01. This form works as a notice for conducting the audit.
Furthermore, the officer will do the required groundwork and depending upon the records to be verified he/she will decide whether the audit is to be carried out at the business premises of the taxpayer or the office of the officer. The place at which the audit will be carried out will be stated in this notice.
Form GST ADT-01 explicitly states the:
- Reference Number of the notice
- Date of the notice
- GSTIN, name and address of the taxpayer
- Financial Year (the period for which the notice is applicable)
- Scheduled date of the audit
- Location of the audit
- List of documents and records required to conduct the audit
- Date on which the documents and records have to be submitted (before the audit)
- Place at which the documents and records have to be submitted (before the audit)
Note: Usually, the notice clearly states the consequences of failure. In case there is a failure in complying with the elements of the notice, the officer will presume that the taxpayer is not in possession of the asked records and documents. The officer has the authority to proceed against the taxpayer as he/she deems fit (as per the provisions of the act and rules) without making any further correspondence to the taxpayer.
- The audit findings will be communicated to the taxpayer in Form GST-ADT-02.
- If the taxpayer accepts the audit findings, he/she can make the payment of tax, interest and penalty as calculated, via form GST-DRC-03. Once the taxpayer completes the payment, the audit proceeding will be closed, and the closure will be communicated to the taxpayer.
- However, if the taxpayer disputes the audit findings, the procedure for demand and recovery will be initiated.