Home
Legal Advice
GST
What is GST audit and who is required to do it?

What is GST audit and who is required to do it?

08-Apr-2026

GST

Answer By law4u team

A GST audit is a detailed examination of a taxpayer’s accounts, records, and compliance with the provisions of the Central Goods and Services Tax Act 2017 (CGST Act) to verify whether the correct amount of GST has been paid, collected, and claimed as input tax credit (ITC). The purpose of a GST audit is to ensure that businesses are maintaining proper records, filing accurate returns, and following all GST rules. It also helps the government identify discrepancies, prevent tax evasion, and improve transparency in the taxation system. There are two types of GST audit under Indian law: Audit by a Chartered Accountant or Cost Accountant (Section 35(5) of CGST Act): Any registered taxpayer whose aggregate turnover exceeds ₹5 crore in a financial year is required to get their accounts audited by a Chartered Accountant (CA) or Cost Accountant. The auditor examines financial statements, GST returns, input tax credit claimed, tax paid, and records of outward and inward supplies. The auditor then submits a signed audit report in Form GSTR-9C along with the annual return (Form GSTR-9) to the GST authorities. Audit by the GST authorities (Section 65 of CGST Act): GST officers have the power to conduct an audit of any registered person. The officer can issue a notice and examine records, returns, invoices, and other relevant documents. This is generally done to verify compliance, detect fraud, or clarify discrepancies in tax payments or ITC claims. The process of GST audit involves submission of all financial statements, books of accounts, and supporting documents to the auditor. The auditor checks for consistency between sales and purchase records, ITC claimed, tax paid, and returns filed. Any discrepancies or errors are reported, and the taxpayer may have to pay additional tax, interest, or penalties if non-compliance is found. In summary, a GST audit is a legal requirement for certain taxpayers to ensure compliance with GST provisions. Any registered taxpayer with turnover exceeding ₹5 crore must get their accounts audited by a qualified professional, and GST authorities themselves can conduct audits to verify accuracy and prevent tax evasion. It is a key mechanism to maintain transparency and accountability in the GST system.

Answer By Ayantika Mondal

Dear client, A GST Audit is an examination of a taxpayer’s account under the CGST Act, 2017 that verifies the correct payment of taxes and proper claims of the input tax credit (ITC). It helps in ensuring compliance as it detects the discrepancies present and prevents further evasion of the tax. There are two types of audits considered. One is conducted by a CA or cost accountant for taxpayers with a turnover of more than Rs.5 crore (Section35(5)) and the other is conducted by the GST Authorities (Section65) to verify the records present and ensure compliance. Hope it helps, contact us for any further queries.

Answer By Anik

Dear client, A GST audit is when someone checks a taxpayers records and financial statements. They want to make sure the taxpayer did everything right. This includes the turnover they said they had the taxes they paid and the input tax credit they claimed. The person doing the audit also checks if the taxpayer followed all the rules of the GST law. The main goal of a GST audit is to ensure the taxpayer kept accounts and paid all the taxes they were supposed to under the GST rules. Under the GST rules taxpayers do not need to get a Chartered Accountant or Cost Accountant to do a GST audit anymore. Before this was required if the taxpayer had an amount of turnover. Now taxpayers still need to file a return, which is called the GSTR-9. In some cases they may also need to file a self-certified reconciliation statement, which is called the GSTR-9C. This depends on how turnover they had and the government decides the limits. The GST audit can also be done by the tax authorities at any time to check if the taxpayer is following all the rules. They can do this whenever they want to make sure everything is okay, with the GST. If you have any query please feel free to contact us.