No business is required to undergo an independent GST audit by a chartered accountant (CA) or cost accountant (CMA) solely because its turnover crosses a threshold under current central GST law. The former turnover-based audit requirement ended on 1 August 2021. A registered person with aggregate turnover above ₹5 crore in a financial year generally must file a self-certified GSTR-9C reconciliation statement—but that filing is not an independent GST audit. Tax authorities can separately initiate an audit or, in specified cases, direct a special audit.
What “GST audit” can mean
The phrase is often used for three different processes. They differ in who initiates them, what is examined, and whether turnover is the trigger.
| Process | Who initiates it | What triggers it | What it involves |
|---|---|---|---|
| Former section 35(5) audit | The registered person arranged it | A turnover threshold under the former rule | An audit by a CA or CMA; this requirement was omitted from 1 August 2021. Finance Act 2021 |
| GSTR-9C | The registered person files it | Aggregate turnover above ₹5 crore in a financial year, subject to applicable rules and taxpayer status | A self-certified reconciliation statement—not a GST audit. CBIC Circular 246/03/2025-GST |
| Department audit under section 65 | The Commissioner or an authorised officer | Selection by the tax authority; not an automatic turnover test | Examination of a registered person’s records and tax compliance. CGST Act, section 65 |
| Special audit under section 66 | An officer not below Assistant Commissioner rank, with prior Commissioner approval | Case-specific complexity and the interest of revenue during proceedings | Examination by a CA or CMA nominated by the Commissioner. CGST Act, section 66 |
When GSTR-9C is required
Under Rule 80(3), a registered person whose aggregate turnover exceeds ₹5 crore during a financial year generally furnishes FORM GSTR-9C with FORM GSTR-9. CBIC Circular 246/03/2025-GST describes the statement as self-certified under the post-1 August 2021 framework. The form reconciles figures declared in the annual return with the audited annual financial statement; it does not require a CA or CMA to conduct a separate GST audit. Read the CBIC circular.
How aggregate turnover is calculated
For this threshold, aggregate turnover is calculated on an all-India basis for persons with the same PAN. It includes taxable and exempt supplies, exports, and inter-State supplies. It excludes central, state, union-territory and integrated GST, compensation cess, and inward supplies on which the recipient pays tax under reverse charge. CGST Act, section 2(6)
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GSTR-9 is a separate filing question
Whether a person must file GSTR-9, or qualifies for an annual-return exemption, is related to but distinct from whether GSTR-9C is required. Check the rules and notifications for the relevant financial year and taxpayer category rather than treating the ₹5 crore GSTR-9C threshold as a complete answer to annual-return obligations.
What happens in a department audit under section 65
A section 65 audit is conducted by the tax authority, not commissioned by the taxpayer. It may cover one financial year or more than one. The officer may examine books, returns and supporting documents, including records concerning turnover, exemptions, deductions, tax rates, input tax credit and refunds. CGST Act, section 65
- Notice: The registered person must receive at least 15 working days’ notice before the audit.
- Response to discrepancies: The taxpayer may reply to findings, and the officer must consider the reply before finalising the audit findings.
- Outcome: Findings are communicated in FORM GST ADT-02.
- Time limit: The audit is to be completed within three months of commencement. The Commissioner may extend this by up to six additional months for reasons recorded in writing.
- When the clock starts: Commencement is the later of the date the called-for records are made available or the date the audit actually begins at the taxpayer’s place of business.
These procedures and periods are set out in section 65 and the related rules. CGST Act, section 65
When a special audit under section 66 can be ordered
A special audit is a case-specific direction, not a general turnover-based requirement. At any stage of scrutiny, inquiry, investigation or other proceedings, an officer not below Assistant Commissioner rank may—with prior approval of the Commissioner—direct the registered person in writing to have records examined by a CA or CMA nominated by the Commissioner. The officer must consider the nature and complexity of the case and the interest of revenue. CGST Act, section 66
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- The direction is issued in FORM GST ADT-03, and findings are communicated in FORM GST ADT-04.
What records to keep
Registered persons have ongoing duties to preserve prescribed accounts and records. For electronic records, the rules require proper backup and production in readable form when requested. A taxpayer must also provide audit-trail links and related record information on demand. These recordkeeping duties apply independently of whether the tax authority has selected the taxpayer for an audit. CGST Rules, recordkeeping requirements
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What to check for your filing or notice
- Identify the financial year and calculate aggregate turnover across India for the same PAN, using the statutory inclusions and exclusions.
- Check whether GSTR-9 and GSTR-9C apply to your taxpayer category for that year, including any relevant notification or exemption.
- If you receive an audit or special-audit communication, follow the specific notice, requested-record list, form and response deadlines; the section 65 and section 66 procedures are different.
- For an actual filing or response, consult the current forms, rules, notifications and taxpayer-specific facts. State and Union Territory GST provisions operate alongside the central framework, so check applicable local notifications as well.
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