February 20, 2023

Special Audit in GST- All You Want to Know

Special Audit in GST is an audit that can be ordered by the tax authorities under certain circumstances. Basically, the aim of the special audit is to ensure the correctness and completeness of the records and returns submitted by the taxpayer. It is important to note that the special audit is not a routine audit and is only conducted in specific cases where the tax authorities feel that there may be a possibility of tax evasion or non-compliance.

When is a Special Audit ordered?

A special audit can be ordered in the following situations:

Complexity of the case:

If a case is too complex and the tax authorities feel that a special audit is necessary to ensure the accuracy of the returns and records submitted by the taxpayer.

Large amount of tax involved:

If the tax involved in a case is huge, the tax authorities may order a special audit to ensure that the taxpayer has paid the correct amount of tax.

Unusual transactions:

If there are unusual transactions or the taxpayer has claimed a huge refund, the tax authorities may order a special audit to verify the correctness of the claim.

Non-maintenance of records:

If the taxpayer is not maintaining proper records or is not able to produce the records when asked, a special audit may be ordered to ensure the correctness of the returns.

Who can order a Special Audit?

A special audit can be ordered by the following authorities:


The Commissioner of CGST/SGST can order a special audit if he feels that it is necessary.

Joint Commissioner:

The Joint Commissioner of CGST/SGST can order a special audit if he has been authorized by the Commissioner.

Appellate Authority:

The Appellate Authority can also order a special audit if he feels that it is necessary to arrive at a decision in an appeal.

National Anti-profiteering Authority:

The National Anti-profiteering Authority can order a special audit in cases related to anti-profiteering.

Procedure for Special Audit:

The procedure for a special audit is as follows:

Issue of notice:

The tax authorities will issue a notice to the taxpayer informing him of the order for a special audit.

Appointment of auditor:

The taxpayer will have to nominate an auditor within 15 days of receiving the notice. If the taxpayer does not nominate an auditor, the tax authorities will appoint an auditor.

Conduct of audit:

The auditor will conduct the audit as per the terms of reference specified by the tax authorities.

Submission of report:

The auditor will submit a report to the tax authorities within 90 days of the appointment. The time limit can be extended by the tax authorities if they feel it is necessary.

Action by the tax authorities:

Based on the report submitted by the auditor, the tax authorities may take further action like demanding additional tax, imposing penalties or prosecuting the taxpayer for non-compliance.


The special audit in GST is an important tool for the tax authorities to ensure that the taxpayers are complying with the provisions of the GST Act. It is important for the taxpayers to maintain proper records and submit accurate returns to avoid any possibility of a special audit. If a special audit is ordered, the taxpayer should cooperate fully with the auditor and submit all the necessary documents and information to ensure that the audit is completed smoothly.


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