GST · 7 min read
GST Departmental Audit (Section 65): What to Expect & How to Prepare
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-04-10
A GST departmental audit under Section 65 is a structured check of your GST compliance by the tax authorities. It is not an accusation — but good records make it painless. Here is how to prepare.
1What a Section 65 audit is
Under Section 65 of the CGST Act, the department can audit a registered taxpayer's records to verify that GST has been correctly declared, ITC correctly claimed and tax correctly paid. You receive a notice in Form GST ADT-01 specifying the period and documents needed.
The audit is generally completed within three months of commencement (extendable to six months). Findings are communicated in Form GST ADT-02.
2Who gets selected
Selection is usually risk-based: large turnover, high ITC relative to output, mismatch trends, certain high-risk sectors, or an irregular filing history. Some audits are random.
Once selected, you must give the officer access to your books, returns and records for the period.
3Documents to keep ready
- Filed GSTR-1 and GSTR-3B for the period, with workings
- Auto-drafted GSTR-2A / GSTR-2B reconciled against your purchase register and ITC claimed
- Sales and purchase invoices, credit/debit notes, e-way bills
- Books of account, trial balance and a GST-wise transaction ledger
- Proof of tax payment (challans / electronic cash & credit ledgers)
- Records supporting ITC eligibility and any reversals (Rules 42/43)
Frequently asked questions
How long does a GST audit take?
A Section 65 audit is generally to be completed within three months of commencement, extendable to six months by the Commissioner. Complex cases can take longer.
What if the audit finds wrong ITC?
You will usually be asked to reverse the ineligible ITC with interest. Penalties depend on whether it was a genuine error or involved fraud/suppression. A demand may follow under Section 73 or 74, which you can contest or appeal.
Is this legal advice?
No. Audit outcomes are fact-specific. Engage a GST practitioner or CA to represent you and review the findings before responding.
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