The GST audit framework has evolved significantly since 2017. The statutory audit under Section 35(5) was discontinued from 1st August 2021 and replaced by self-certified GSTR-9C. The departmental audit under Section 65 and the special audit under Section 66 remain in force. Understanding the differences between these audit types is essential for compliance planning.
This article explains the key differences between departmental audit and statutory audit under GST.
Statutory Audit Under Section 35(5): Discontinued
The statutory audit required a CA or CMA to audit the taxpayer's accounts and submit a reconciliation statement in GSTR-9C. This requirement was discontinued from 1st August 2021. The GSTR-9C is now self-certified by the taxpayer.
Departmental Audit Under Section 65
The departmental audit is conducted by GST officers. It can cover any registered taxpayer, regardless of turnover. The audit is initiated by the department and follows the process outlined in Section 65.
Special Audit Under Section 66
A special audit is ordered by the Assistant or Deputy Commissioner and conducted by a CA or CMA nominated by the Commissioner. It is ordered in complex cases where the officer believes that the taxpayer has not correctly declared tax liability.
Key Differences
- Applicability: Statutory audit applied above ₹5 crore turnover; departmental audit applies to any turnover; special audit applies at the officer's discretion.
- Who conducts: Statutory audit by CA/CMA; departmental audit by GST officers; special audit by nominated CA/CMA.
- Trigger: Statutory audit was annual and mandatory; departmental audit is initiated by the department; special audit is ordered in specific cases.
- Current status: Statutory audit discontinued; departmental and special audits remain in force.
Conclusion
The GST audit landscape has shifted from mandatory statutory audit to self-certified reconciliation, with departmental and special audits remaining as enforcement tools. Taxpayers must understand the current framework and prepare accordingly.
At Anuj Desai & Associates, we provide expert advisory services on all types of GST audits. Our team can help you prepare for departmental audits and respond to special audits.
For a confidential consultation, contact us at office@anujdesaiassociates.com or call 9619456656. Visit our website at https://anujdesaiassociates.com or connect with our founder on LinkedIn at linkedin.com/in/ca-anuj-desai-122547230.