GST ADT-01: Audit Notice under Section 65 and How to Prepare
FORM GST ADT-01 is the notice of a departmental audit under Section 65, issued at least fifteen working days before the audit begins. The audit is to be completed within three months of commencement, extendable by six months for recorded reasons. Findings are communicated in FORM GST ADT-02 within thirty days of conclusion, and anything adverse there normally becomes a DRC-01A or DRC-01.
What is this notice?
An audit under Section 65 is conducted by the tax authorities at your place of business or in their office, for a financial year or part of one. ADT-01 tells you the period, the place and the date it begins. It is distinct from a special audit under Section 66, which is conducted by a nominated chartered or cost accountant on a direction issued with the Commissioner's prior approval.
Common reasons it is issued
- Selection on the department's risk parameters for the period
- Significant differences between GSTR-9, GSTR-9C and the audited financial statements
- Sustained mismatch between credit claimed and credit available
- Sector-wide or turnover-based selection for the year
How to reply — step by step
- Reconcile before they arrive: books to GSTR-1, GSTR-3B and GSTR-9, and credit to GSTR-2B, for the whole period under audit. Differences you have already explained are far cheaper than differences found for you.
- Assemble the record set — invoices, agreements, ledgers, ITC registers, reversal workings under Rules 42 and 43, and the reconciliation statement.
- Answer written queries in writing and keep copies. Oral explanations during an audit do not survive into the order.
- Consider paying any clear short payment in DRC-03 during the audit, which limits interest and, in appropriate cases, penalty exposure.
- On ADT-02, respond on the merits promptly — the findings there are the skeleton of any DRC-01 that follows, and it is easier to displace a finding before it becomes a demand.
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Draft my reply free →Frequently asked questions
How much notice must the department give before a GST audit?
At least fifteen working days, in FORM GST ADT-01, under Rule 101(2).
How long can a Section 65 audit run?
It must be completed within three months of commencement, extendable by up to six further months by the Commissioner for reasons recorded in writing.
Is an audit under Section 65 the same as a special audit?
No. Section 65 is conducted by the department itself. Section 66 is a special audit by a chartered or cost accountant nominated by the Commissioner, directed where the officer considers the value or credit claimed is not correctly declared.
Does ADT-02 create a demand?
No. It communicates findings. A demand requires a notice under Section 73 or 74, which is where your substantive reply belongs.
Related notices
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