Section 65 of CGST Act, 2017 : Section 65: Audit By Tax Authorities

Explanation using Example

Imagine a scenario where the Commissioner of Goods and Services Tax (GST) decides to audit a local electronics store, 'TechGear Pvt. Ltd.', which is a registered person under the GST Act. The Commissioner authorizes an officer to conduct the audit for the financial year 2021-22 to ensure compliance with GST regulations.

TechGear Pvt. Ltd. receives a notice 20 days before the scheduled audit, informing them about the upcoming audit process. This notice is in accordance with the law that requires at least a fifteen-day notice period.

The audit begins on the scheduled date, and the officers decide to conduct it at the TechGear's business premises. The officers ask for the company's sales invoices, purchase records, and GST returns filed during the audit period.

TechGear provides the necessary facilities and assistance to the officers for verifying their books of account and other documents. The audit is completed within three months, as prescribed by the law.

After the audit, the officers find that TechGear had inadvertently under-reported sales in the last quarter of the year, leading to a lower GST payment than what was actually due. Within thirty days of concluding the audit, the officers inform TechGear of the findings and explain the consequences and their rights.

As a result of the audit findings, the proper officer decides to initiate action under section 73 of the GST Act for the recovery of tax not paid due to the under-reporting of sales.