| name | gst-audit |
| description | GST Audit assistance under Section 35(5)/Section 65/66. Covers departmental audit (Section 65) representation and special audit (Section 66). Also assists with GST annual audit checklist, ITC reversal calculations, and reconciliation for audit submissions.
|
| when_to_use | When a client receives a GST audit notice (Section 65/66), or when the CA needs to prepare for a GST audit, or conduct an internal GST audit review for a client.
|
| effort | high |
| model | claude-sonnet-4-6 |
| allowed-tools | ["mcp__memory_bank__get_client","mcp__memory_bank__log_notice","mcp__memory_bank__get_firm_profile","Read","Write"] |
GST Audit Assistance
FINANCIAL INTEGRITY: GST audit proceedings carry significant legal risk. All representations must be reviewed and signed by a qualified CA/advocate. Audit findings can result in large demands, interest, and penalties. Nothing is submitted without partner sign-off.
Section 65 vs Section 66 Audit
| Feature | Section 65 | Section 66 |
|---|
| Type | Departmental Audit | Special Audit by CA/CMA |
| Who conducts | GST officers | CA / CMA appointed by Commissioner |
| Trigger | Routine or risk-based | Where accounts are complex / suspected evasion |
| Notice | FORM GST ADT-01 | FORM GST ADT-03 |
| Period | Within 3 months (extendable to 6M) | Within 90 days (extendable) |
| Reply | FORM GST ADT-02 | FORM GST ADT-04 |
GST Audit Checklist — Areas of Scrutiny
1. Registration and Profile
2. Outward Supplies
3. Input Tax Credit
4. Returns and Payments
5. E-way Bill Compliance (for goods movement)
6. RCM (Reverse Charge Mechanism)
7. TDS/TCS under GST (if applicable)
Audit Representation Package
Documents to Prepare
- Registration certificate + amendments
- Annual turnover certificate
- Books of accounts (electronic records: Tally/ERP)
- GSTR-1, 3B, 9 for audit period
- GSTR-2B downloads for all months
- Purchase register + sales register
- Bank statements
- Inward / outward supply reconciliation statement
- ITC register with supporting invoices
- Explanation for any differences identified
Draft Response to FORM GST ADT-01
[Firm Letterhead]
Date: [date]
To,
The [Superintendent / Assistant Commissioner]
[Office Address]
Sub: Response to Notice in FORM GST ADT-01 dated [date] — [Client Name] | GSTIN [GSTIN]
Sir/Madam,
With reference to the above-mentioned notice for GST audit of [Client Name] for the
period [period], we hereby acknowledge the same and confirm the following:
DOCUMENTS AVAILABLE FOR AUDIT:
- Books of accounts maintained in: [Tally Prime / other software]
- Period covered: [FY start to end]
- Location: [office address] / [shared digitally via secure folder]
AUDIT SCHEDULE PREFERENCE:
We request that the audit be scheduled for: [proposed dates]
Contact person: [name, phone, email]
We assure full cooperation during the audit proceedings.
Yours faithfully,
[CA Name] [Membership No.]
[Firm Name]
Post-Audit — Reply to FORM GST ADT-02
If the audit results in a demand / observation:
- Review each para of ADT-02 carefully
- Identify: agreed items (pay via DRC-03) and disputed items
- File a detailed written reply para-by-para with supporting documents
- If demand > Rs.5 Lakh and dispute genuine, consider filing an appeal (Form APL-01)
ITC Calculation for Audit Findings
If auditors find excess ITC claimed, calculate:
- Principal ITC reversal
- Interest @ 24% per annum from date of claim to date of payment (Section 50)
- Penalty — equal to tax amount if fraud; 10% (minimum Rs.10,000) if not fraud
EXCESS ITC CALCULATION (for payment via DRC-03):
Excess ITC claimed: Rs.X
Interest @ 24% from [date of GSTR-3B] to [today]: Rs.X
Total payable via DRC-03: Rs.X
Recommendation: Pay DRC-03 immediately to stop interest accrual.
