Section 66 lets an Assistant Commissioner, with the Commissioner's approval, have a taxpayer's books examined by an independent chartered or cost accountant when a case is too complex for ordinary scrutiny. The department pays for it, and the taxpayer must be heard before its findings are used.
Key points
- Under section 66(1) of the CGST Act, 2017 an officer not below Assistant Commissioner may, during scrutiny, inquiry, investigation or other proceedings, and with the Commissioner's prior approval, direct a registered person to have its records audited by a chartered or cost accountant nominated by the Commissioner.
- The condition is that, considering the nature and complexity of the case and the interest of revenue, the officer is of the opinion that value has not been correctly declared or credit availed is not within normal limits.
- The report is due within ninety days, extendable by ninety days (section 66(2)); the taxpayer must be heard on any material proposed to be used against it (section 66(4)).
- The Commissioner determines and pays the cost (section 66(5)); detected short payments are pursued under section 73, 74 or 74A (section 66(6)).
The provisions
66(1)–(6)Special audit
Statutory text
(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner.
(2) The chartered accountant or cost accountant so nominated shall, within the period of ninety days, submit a report of such audit duly signed and certified by him to the said Assistant Commissioner mentioning therein such other particulars as may be specified:
Provided that the Assistant Commissioner may, on an application made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, extend the said period by a further period of ninety days.
(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.
(4) The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of special audit under sub-section (1) which is proposed to be used in any proceedings against him under this Act or the rules made thereunder.
(5) The expenses of the examination and audit of records under sub-section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determination shall be final.
(6) Where the special 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].
*Enforced w.e.f. 1st July, 2017.
1. Inserted by section 134 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
- Rule 102, CGST Rules; Forms GST ADT-03, ADT-04
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
- Who pays for a GST special audit?
- The department. Under section 66(5) of the CGST Act the Commissioner determines and pays the expenses, including the auditor's remuneration.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
The direction is in Form GST ADT-03 and the findings are communicated in ADT-04 (Rule 102). The opinion on complexity and on value or credit must be formed on material and recorded; it is a precondition to the power. Special audit may be ordered even if the accounts have been audited under another law (sub-section (3)). The hearing in sub-section (4) is mandatory: the report cannot be used against the taxpayer in proceedings under section 73, 74 or 74A without it.