Audit by tax authorities :
“Audit” means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or rules made thereunder – section 2(13) of CGST Act.
Section 71(2) of CGST Act makes provision for demanding and making available records for audit.
There was a system of EA-2000 audit in excise and service tax. This may continue in modified form in GST.
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 – section 65(1) of CGST Act.
The tax authorities may conduct audit at the place of business of the taxable person and/or in their office.
The registered person shall be informed, by way of a notice, sufficiently in advance, not less than fifteen working days, prior to the conduct of audit in such manner as may be prescribed.
The audit under section 65(1) shall be completed within a period of three months from the date of commencement of audit – section 65(4) of CGST Act.
‘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 – Explanation to section 65(4) of CGST Act.