Section 65 authorises the department to audit a registered person's books — at its premises or in the office — within fixed time limits. Audit findings are not a demand: any tax found short must be pursued through the ordinary adjudication provisions.
Key points
- Under section 65(1) of the CGST Act, 2017 the Commissioner, or an officer authorised by general or specific order, may audit any registered person for the period, at the frequency and in the manner prescribed (Rule 101).
- At least fifteen working days' notice must be given (Form GST ADT-01); the audit must be completed within three months of commencement, extendable by the Commissioner by up to six months.
- Findings, with reasons and the person's rights and obligations, must be communicated within thirty days of conclusion (Form GST ADT-02).
- Tax found short paid, wrongly refunded, or credit wrongly availed or utilised is pursued under section 73, 74 or 74A; the findings themselves are not a demand.
- In LJ-Victoria Properties v Union of India (2024) the Bombay High Court upheld an audit of a year during which the person was registered, though its registration had since been cancelled.
The provisions
65(1)–(4)Authorisation, notice and time limit
Statutory text
(1) The Commissioner or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed.
(2) The officers referred to in sub-section (1) may conduct audit at the place of business of the registered person or in their office.
(3) The registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed.
(4) The audit under sub-section (1) shall be completed within a period of three months from the date of commencement of the audit:
Provided that where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months.
Explanation.- For the purposes of this sub-section, the expression "commencement of audit" shall mean the date on which the records and other documents, called for by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later.
*Enforced w.e.f. 1st July, 2017.
- Rule 101, CGST Rules; Forms GST ADT-01, ADT-02
Case on this provision
LJ-Victoria Properties Pvt Ltd v Union of India
2024:BHC-OS:18689-DB · 19.11.2024 · Bombay High Court, Division Bench
- Facts
- A company leasing commercial property was registered from March 2019 and had its registration cancelled with effect from 01.04.2023. An audit notice was then issued for 2020–21, a year in which it was registered. It argued that section 65 applies only to a "registered person", which it no longer was.
- Held
- The definition of "registered person" excludes only a person holding a Unique Identity Number; it does not exclude a person whose registration has since been cancelled. Read with section 29(3), which preserves liabilities for the period before cancellation, section 65 permits audit of a year during which the person was registered. The petition was dismissed; an earlier Madras High Court decision quashing a post-cancellation audit was distinguished.
- Here
- Cancelling registration does not end exposure to audit for the years of registration. The Rajasthan High Court took the same view in Ashoka Fabricast (2024).
65(5)–(7)Conduct, findings and follow-up
Statutory text
(5) During the course of audit, the authorised officer may require the registered person, -
(i) to afford him the necessary facility to verify the books of account or other documents as he may require;
(ii) to furnish such information as he may require and render assistance for timely completion of the audit.
(6) On conclusion of audit, the proper officer shall, within thirty days, inform the registered person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings.
(7) Where the audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74 1[or section 74A].
1. Inserted by section 133 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
What it means
The taxpayer must give access to books and documents and furnish information. Findings are communicated in ADT-02 within thirty days. The taxpayer may accept and pay discrepancies with interest; anything disputed must be taken through section 73, 74 or 74A with a show cause notice. The Bombay High Court has said that audit findings in ADT-02 are not an adjudication order and cannot be recovered as such (SVS Aqua Technologies, 31.08.2026).
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- How much notice is given before a GST audit?
- At least fifteen working days, in Form GST ADT-01 (section 65(3) CGST). The audit must be completed within three months of commencement, extendable by up to six months.
- Can GST audit be done after registration is cancelled?
- For years in which the person was registered, yes — the Bombay High Court held so in LJ-Victoria Properties (2024), as did the Rajasthan High Court in Ashoka Fabricast (2024). An earlier Madras High Court decision took a narrower view.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
The audit may cover one or more financial years (Rule 101(1)). "Commencement" is the later of the date the records called for are made available and the date audit actually begins at the place of business (Explanation), so the three-month clock does not start while the taxpayer withholds records. Audit selection follows risk parameters set by the department.