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GST Audit & Assessment Support – N D Savla & Associates
GST Services

GST Audit & Assessment Support
Section 65 Audit, Section 66 Special Audit & Section 73/74 Demand Defence

Defence-oriented GST audit and assessment representation for registered taxpayers — departmental audit under Section 65, special audit under Section 66, scrutiny of returns under Section 61, Form GST ADT-01/ADT-02 handling, demand defence under Sections 73 and 74, and DRC-03 voluntary payment, from intimation through to closure.

Part of our GST practice: GST Compliance GST Audit GST Notice GSTR-2B Reconciliation

Overview

Why GST Audit & Assessment Support Matters

A GST audit or assessment is a direct examination of a taxpayer's records by the tax authorities — and it can lead to significant demands if discrepancies surface. Professional preparation and representation therefore make a real difference to the outcome. The earlier requirement for a mandatory Chartered Accountant audit was removed and the annual reconciliation became self-certified, so the department now relies far more heavily on direct departmental audits and scrutiny. As a result, every registered taxpayer now faces a higher likelihood of direct departmental examination than before.

A departmental audit is far more intensive than a self-certified reconciliation, and the audit report is often the beginning of a separate demand chain rather than the end of the matter. The difference between conceding every finding and defending the contestable ones — or between a Section 73 non-fraud route and a Section 74 fraud characterisation — can change the entire penalty exposure. A defence-oriented approach protects the taxpayer's position at every stage.

N D Savla & Associates delivers complete GST audit and assessment support — stage assessment, pre-audit health check, record preparation, intimation and scrutiny response, audit representation, findings analysis, voluntary payment or defence, and representation through closure. Our practice connects with the wider GST compliance framework and coordinates with GST audit, GST notice response, and GSTR-2B reconciliation and ITC review — so every taxpayer receives one integrated audit-defence engagement.

Our support covers scrutiny of returns, departmental audit, special audit, and the demand proceedings that can follow. The engagement adapts to whichever stage the taxpayer is facing, and because early-stage handling often prevents escalation to a fuller examination, we engage as early as possible to contain the matter.

Common Audit & Assessment Scenarios

When Should a Taxpayer Bring in Audit Support?

GST audit support is relevant across every realistic profile, but there are specific situations where representation changes the outcome materially. The approach shifts with the stage, the provision, and the nature of the discrepancy.

Manufacturer in a Section 65 Departmental Audit

Multi-year departmental audit ordered by the Commissioner — Form GST ADT-01 intimation response, multi-year reconciliation, and representation through the examination to the ADT-02 findings.

Trader Facing a Section 61 Scrutiny Notice

Scrutiny on a GSTR-1 versus GSTR-3B mismatch — reconciliation and a satisfactory explanation within the prescribed time to close the matter at the cheapest stage before any escalation.

Business Directed Into a Section 66 Special Audit

Special audit invoked on an abnormally high credit claim — preparation, support for the Commissioner-nominated Chartered Accountant or Cost Accountant, and defence of the taxpayer's position.

Taxpayer Facing a Section 73 Demand

Non-fraud demand after an audit — show cause notice response with reconciliation, documentation, and legal grounds to reduce or eliminate the demand and contain the penalty.

Business Facing a Section 74 Fraud Demand

Demand alleging suppression with much higher penalty exposure — defence against the fraud characterisation and reclassification of the matter into the lower-exposure non-fraud route where justified.

Enterprise Seeking a Pre-Audit Health Check

Voluntary review before any notice arrives — reconciliation, exposure identification, and selective DRC-03 voluntary payment on genuine items to reduce penalty and stop the Section 50 interest clock.

Our Services

Our GST Audit & Assessment Support Services

Our practice follows a structured methodology across every engagement — stage assessment, pre-audit health check, record preparation, representation, findings analysis, and defence or selective voluntary payment. The six service blocks below cover the end-to-end audit defence.

01

Departmental Audit Representation Under Section 65

The departmental audit under Section 65 of the CGST Act 2017 is the most comprehensive examination the department conducts directly — the Commissioner or an authorised officer orders it to verify declared turnover, taxes paid, refunds claimed, input tax credit availed, and overall compliance, across one financial year or several years together. We use the advance Form GST ADT-01 intimation window to organise a clean, reconciled position, represent the taxpayer through the examination, and analyse the Form GST ADT-02 findings — which are often the trigger for a separate demand stage rather than the end of the matter.
CGST Act 2017 – Section 65 · ADT-01 / ADT-02
02

Special Audit Support Under Section 66

The special audit under Section 66 is a targeted, expert-led examination, invoked only during scrutiny, investigation, or other proceedings, where an officer not below Assistant Commissioner rank — with the Commissioner's prior approval — forms the view that the case is complex, the value is incorrectly declared, or the input tax credit claim is abnormally high. It is conducted by a Chartered Accountant or Cost Accountant nominated by the Commissioner, at government cost, and can be directed even where another law's audit was already done. We prepare the taxpayer to support the nominated auditor while protecting the taxpayer's position throughout.
CGST Act 2017 – Section 66
03

Scrutiny of Returns Response Under Section 61

Scrutiny of returns under Section 61 is usually the first stage of departmental attention — the proper officer examines filed returns, compares figures across them, and seeks explanations for any discrepancy. Common triggers include GSTR-1 versus GSTR-3B mismatches, differences between credit claimed and credit in the auto-drafted statements, unusually high credit claims, frequent amendments, and risk-based analytics. A satisfactory explanation closes the matter; an absent or unsatisfactory one can lead to audit, special audit, or demand. We respond with proper reconciliation and explanation to close the matter at this early, cheapest stage.
CGST Act 2017 – Section 61
04

Demand Defence Under Section 73 & Section 74

Where an audit or scrutiny detects a discrepancy, the department can raise a demand. Non-fraud cases proceed under Section 73 with lower penalty exposure; fraud, wilful misstatement, or suppression cases proceed under Section 74 with much higher exposure — and the characterisation as fraud is itself often contestable. Both routes begin with a show cause notice and an opportunity to respond before any order. We prepare thorough, evidence-backed show cause notice responses that address each alleged discrepancy with reconciliation, documentation, and legal grounds, and frequently defend against an unjustified fraud characterisation to bring a matter within the lower-exposure route. Our GST notice service handles the notice response.
CGST Act 2017 – Section 73, 74 · SCN
05

DRC-03 Voluntary Payment & Penalty Reduction

Not every audit finding is worth contesting. Voluntary payment through Form DRC-03 lets a taxpayer settle a genuine, accepted liability without waiting for a formal demand — and paying after the audit report but before a show cause notice can significantly reduce the penalty while stopping the Section 50 interest clock from running further. The decision must be selective: only genuinely payable items merit a DRC-03 payment, since paying a contestable item concedes ground unnecessarily. We separate the genuine liabilities from the contestable items before recommending any payment, minimising the overall exposure.
Form DRC-03 · Section 50 Interest
06

Eight-Step Audit Support Process & Document Preparation

Our team follows a structured eight-step methodology end to end: stage assessment, pre-audit health check, record preparation, intimation or scrutiny response, audit representation, findings analysis, voluntary payment or defence, and representation through closure. Record preparation uses a standardised checklist — GSTR-1, GSTR-3B, GSTR-9 and GSTR-9C, audited financial statements, GSTR-2B for ITC reconciliation, purchase and sales registers, tax invoices and debit/credit notes, ITC working papers, reverse charge records, e-way bill data, and the electronic credit and cash ledgers — so the taxpayer presents a clean, reconciled position to the officer. Our internal audit service supports the wider controls review.
GSTR-9 / 9C · GSTR-2B · E-Way Bill

Broader Practice

Our Broader GST & Tax Dispute Services

GST audit and assessment support is the defence layer — but it operates inside a wider compliance and dispute map. Our complete practice covers:

GST ComplianceHub page for the full GST compliance framework.
GST AuditGSTR-9C reconciliation and audit support.
GST NoticeGST notice response and representation.
GSTR-2B Reconciliation & ITC ReviewInput tax credit eligibility review.
GST ReconciliationBooks-to-returns reconciliation.
GSTR-9 Annual ReturnAnnual return for regular taxpayers.
GST Refund ServicesAll Section 54 refund categories.
Scrutiny AssessmentIncome tax scrutiny representation.
Income Tax NoticeIncome tax notice response.
Internal AuditProcess and controls review.
CIT AppealsAppeal representation.
Reverse Charge MechanismRCM compliance framework.

Frequently Asked Questions

Common Questions on GST Audit & Assessment

What is a GST departmental audit under Section 65?
A GST departmental audit under Section 65 of the CGST Act 2017 is an examination of a taxpayer's records, returns, and documents conducted directly by the tax authorities to verify turnover, taxes paid, refunds, input tax credit, and compliance. The taxpayer receives advance intimation in Form GST ADT-01, the audit is completed within the prescribed period, and the findings are issued in Form GST ADT-02. Where it detects unpaid tax or wrongly availed credit, the officer can initiate demand proceedings under Section 73 or Section 74. Our GST audit page covers the reconciliation side.
What is the difference between a Section 65 audit and a Section 66 special audit?
A Section 65 departmental audit is a general examination conducted by the department's officers at the Commissioner's discretion. A Section 66 special audit is invoked only during scrutiny, investigation, or proceedings, where an officer of at least Assistant Commissioner rank, with the Commissioner's prior approval, believes the case is complex or the credit claimed is abnormally high. The special audit is conducted by a Chartered Accountant or Cost Accountant nominated by the Commissioner, at government cost, and can apply even where another law's audit was done. Our GST compliance page covers the broader framework.
What is scrutiny of returns under Section 61?
Scrutiny of returns under Section 61 of the CGST Act 2017 is a preliminary check where the officer examines filed returns for correctness, compares figures across returns, and seeks explanations for discrepancies. Common triggers include GSTR-1 versus GSTR-3B mismatches, credit differences against the auto-drafted statements, unusually high credit claims, and risk-based analytics. A satisfactory explanation closes the matter; an unsatisfactory one can escalate to audit or demand. Our GST reconciliation page covers the reconciliation that prevents triggers.
What happens if discrepancies are found during a GST audit?
Where a GST audit detects unpaid tax, short-paid tax, erroneous refund, or wrongly availed credit, the officer can initiate demand proceedings. Non-fraud cases go under Section 73 with lower penalty exposure, while fraud, wilful misstatement, or suppression cases go under Section 74 with much higher exposure. Both begin with a show cause notice and an opportunity to respond. Interest under Section 50 applies. Voluntary payment through DRC-03 before the notice can reduce penalties. Our GST notice page covers the notice response.
How can voluntary payment through DRC-03 help after an audit?
Form DRC-03 lets a taxpayer pay an accepted liability voluntarily, often with a reduced penalty, before the matter escalates. Paying a genuine liability after the audit report but before a show cause notice can significantly reduce the penalty exposure and stops further interest from accumulating. The decision should be selective — only genuinely payable items merit a DRC-03 payment, while contestable items are defended. Our team analyses each finding to minimise the overall exposure. Our GSTR-2B reconciliation and ITC review page covers the credit verification.
How should a business prepare for a GST departmental audit?
A business should prepare before the Form GST ADT-01 intimation arrives, ideally through a pre-audit health check. Preparation involves reconciling GSTR-9 and GSTR-9C with the audited accounts, reconciling the credit claimed against GSTR-2B, verifying turnover against the books and e-way bill data, confirming reverse charge discharge, and screening for blocked or ineligible credit. Correcting discrepancies before the audit, where possible through voluntary payment, is far cheaper than facing a demand. Our internal audit page covers the wider controls review.
Can a business be audited under GST even if turnover is below the GSTR-9C threshold?
Yes, a business can face a GST departmental audit regardless of turnover. The self-certified GSTR-9C applies only above a prescribed threshold, and the earlier mandatory Chartered Accountant audit was removed. However, the departmental audit under Section 65 and the special audit under Section 66 continue for any registered taxpayer at the authorities' discretion. The shift away from mandatory certification has increased the frequency of departmental audits. Every taxpayer should stay audit-ready. Our GSTR-9 annual return page covers the annual return.

Facing a GST Audit or Demand? Talk to Our GST Team.

Complete GST audit and assessment support under one roof — stage assessment, pre-audit health check, record preparation, Form GST ADT-01 intimation and scrutiny response, audit representation, ADT-02 findings analysis, DRC-03 voluntary payment or defence, and representation through to closure, delivered by qualified Chartered Accountants.

Get in Touch
📞 +91 98190 00511 · +91 91670 58000 · +91 98190 00445
✉ nainitsavla@savlagroup.in · 📍 N D Savla & Associates, Mumbai

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