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No business is required to undergo an independent GST audit by a CA or CMA solely because its turnover crosses a threshold under current central GST law. The former turnover-based requirement ended on 1 August 2021. Registered persons with aggregate turnover above ₹5 crore in a financial year generally have to file a self-certified GSTR-9C reconciliation statement, but that filing is not a GST audit. Tax authorities can still audit a registered person under section 65 or order a case-specific special audit under section 66.
What the ₹5 crore threshold requires—and what it does not
For a registered person whose aggregate turnover exceeds ₹5 crore in a financial year, Rule 80(3) generally requires a self-certified FORM GSTR-9C reconciliation statement to be furnished with FORM GSTR-9. The Central Board of Indirect Taxes and Customs (CBIC) describes this requirement in Circular 246/03/2025-GST. GSTR-9C reconciles the supplies declared in the annual return with the audited annual financial statement; it is not an independent GST audit by a CA or CMA.
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The threshold applies to aggregate turnover, calculated on an all-India basis for all businesses sharing the same PAN. It includes taxable and exempt supplies, exports, and inter-State supplies. It excludes central, state, union-territory and integrated GST, compensation cess, and inward supplies on which the recipient pays tax under reverse charge. See the CGST Act and related provisions.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchGSTR-9 filing exemptions are a separate issue. The ₹5 crore statement does not determine every annual-return exemption or taxpayer-specific filing obligation; check the rules and notifications for the relevant financial year and category.
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Four processes often called a “GST audit”
| Process | Who initiates it | What it means | Trigger |
|---|---|---|---|
| Former section 35(5) audit | Taxpayer | Independent audit by a CA or CMA | Omitted with effect from 1 August 2021; no longer a current turnover-triggered GST audit requirement. |
| GSTR-9C | Taxpayer filing | Self-certified reconciliation statement | Generally required when aggregate turnover exceeds ₹5 crore in a financial year, subject to applicable rules and taxpayer circumstances. |
| Section 65 audit | Tax authority | Audit of a registered person’s records | Selection or direction by the Commissioner or an authorised officer; not automatically triggered by a turnover threshold. |
| Section 66 special audit | Tax authority | Examination by a CA or CMA nominated by the Commissioner | Case-specific complexity and revenue-interest grounds, with the required approval and direction. |
The previous taxpayer-appointed audit requirement was in section 35(5) of the CGST Act. The Finance Act 2021 omitted it effective 1 August 2021; the amendment is set out in the Finance Act, 2021. Older material saying a business must obtain a GST audit once it crosses the former threshold does not describe the current central-law position.
When tax authorities may audit a registered person
Section 65: department audit
Under section 65, the Commissioner or an authorised officer may audit a registered person’s records for a financial year or for multiple financial years. It is an authority-led process, not an audit that every taxpayer above a specified turnover must undergo. The officer may examine books, returns and supporting documents, including those relating to turnover, exemptions and deductions, tax rates, input tax credit and refunds.
- Notice: The taxpayer must receive at least 15 working days’ notice before the audit.
- Time to complete: The audit is to be completed within three months from commencement. The Commissioner may extend that period by up to six additional months for reasons recorded in writing.
- When the clock starts: Commencement is the later of the date the called-for records are made available and the date the audit actually begins at the place of business.
- Findings: The taxpayer may respond to discrepancies, and the officer must consider the reply before finalising findings. The findings are communicated in FORM GST ADT-02.
These procedures and time limits appear in section 65 of the CGST Act and the CGST Rules.
Section 66: special audit
A special audit can be directed at any stage of scrutiny, inquiry, investigation or other proceedings. An officer not below the rank of Assistant Commissioner must consider the nature and complexity of the case and the interest of revenue, and obtain prior approval from the Commissioner. The Commissioner nominates the CA or CMA who examines the records; the taxpayer does not choose an auditor to satisfy a general turnover rule.
The direction is made in writing using FORM GST ADT-03. The nominated professional must report within 90 days, although the authority may allow an extension of up to a further 90 days for sufficient reason. Findings are communicated using FORM GST ADT-04. See section 66 of the CGST Act and the CGST Rules.
How to work out what applies to your business
- Identify the financial year and taxpayer status. Annual-return rules and exemptions can vary by year and category, so do not rely on a threshold in isolation.
- Calculate PAN-wide aggregate turnover. Combine the relevant supplies of persons sharing the PAN across India, applying the statutory inclusions and exclusions.
- Check the annual-return and reconciliation requirements. If aggregate turnover exceeds ₹5 crore, check whether GSTR-9C is required for that year and file it as a self-certified reconciliation with the annual return where applicable.
- Distinguish a filing duty from an audit direction. A GSTR-9C requirement is not a department audit notice. If an authority issues a section 65 or section 66 communication, follow its stated procedure and deadline; the rules governing that process differ from annual filing.
Keep records even if no audit is required
Registered persons have ongoing duties to preserve prescribed accounts and records. For electronic records, the rules require proper backup and readable production of requested records; audit-trail links and related record information must also be provided on demand. These recordkeeping obligations apply independently of whether a taxpayer is selected for a department audit. The CGST Rules set out the relevant requirements.
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- Enough forms for 1 year for churches of approximately 150 members
- 5 3/16" x 9"
- Includes forms for church receipts, member contributions, and disbursements
For an actual filing or notice, verify the current forms, rules, notifications, relevant financial year and taxpayer-specific facts. The provisions described here are the central CGST framework; State and Union Territory GST provisions operate alongside it.
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