GST Audit: Navigating Compliance and Departmental Scrutiny
In 2026, GST Audits have evolved. While the requirement for a CA/CMA to sign off on GSTR-9C has been replaced by self-certification, the Departmental Audit (Section 65) has become the primary tool for enforcement. At Diwakar and Associates, we bridge the gap between your books and the law, ensuring your "self-assessment" holds up under the highest level of scrutiny.
Types of Audits in the Current Regime
- Self-Certified Reconciliation (GSTR-9C) : A yearly requirement to reconcile the figures in your Annual Return (GSTR-9) with your Audited Financial Statements.
- Departmental Audit (Section 65): Conducted by the Commissioner or authorized officers at your place of business. You are typically given 15 days' notice via Form GST ADT-01.
- Special Audit (Section 66): Triggered in complex cases where the department suspects undervalued sales or excessive ITC, requiring an audit by a nominated CA/CMA.
Applicability & Deadlines (The Numbers)
GSTR-9/9C Threshold
Mandatory for taxpayers with an aggregate annual turnover exceeding ₹5 Crores. (Filing is generally waived for those below ₹2 Crores).
Audit Duration
A Departmental Audit must be completed within 3 months (extendable by 6 months).
2026 Critical Deadline
For many businesses, 2026 marks the final year for the department to initiate audits for the early years of GST. Representation during this "limitation window" is critical to avoid time-barred demands.
How we provide this service at Diwakar and Associates
We manage your audit risks through a clinical, three-layered approach:
1
The Reconciliation Layer
We perform a deep-dive match between your Sales Register, Purchase Register, GSTR-2B, and the Invoice Management System (IMS). We ensure that every credit claimed is backed by a valid e-invoice and proof of payment.
2
The Departmental Defense
When you receive a notice in ADT-01, we take over. We organize your records, prepare the "Legal Position" on disputed ITC, and represent you before the visiting audit team to ensure that minor procedural lapses don't turn into major tax demands.
3
Gap Rectification
If our internal audit finds discrepancies (like RCM non-payment or ineligible ITC), we help you make voluntary payments via DRC-03 before the audit starts. This can save you up to 100% in penalties under Section 73.
4
Final Report Liaison
Once the audit findings are issued in ADT-02, we assist in drafting the final rebuttal to ensure the audit is closed with minimal or nil demand.
The Impact
We conduct internal health checks, prepare self-certified reconciliation statements, and provide end-to-end representation during government-led audits.
Our Commitment to You
Accuracy is the cornerstone of our practice. At Diwakar and Associates, we commit to making your business "Audit-Proof." We promise a transparent and thorough verification process that identifies risks before the department does. Our goal is to provide you with the professional confidence that your GST records are not just compliant, but are a true and defensible reflection of your business excellence.
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