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CA Final · Indirect Tax Laws · Assessment and Audit

During audit of Mehta Chemicals Pvt. Ltd., the proper officer notes discrepancies in input tax credit availed. Which sequence correctly follows rule 101 of the CGST Rules, 2017?

The officer verifies records and notes observations, may inform the person of discrepancies, receives the reply, and finalises findings only after considering it. On conclusion of the audit the findings are communicated in FORM GST ADT-02. ADT-03 and ADT-04 belong to special audit.

  1. AOfficer verifies documents and records observations in audit notes; may inform discrepancies; the person may reply; officer finalises findings after considering the reply; findings are informed in FORM GST ADT-02Correct
  2. BOfficer finalises findings first; the person may reply afterwards; findings are informed in FORM GST ADT-01
  3. COfficer informs discrepancies in FORM GST ADT-03 and findings are communicated in FORM GST ADT-04
  4. DOfficer need not consider the reply of the person before finalising findings, and communicates them in FORM GST ADT-02

Explanation

Rule 101(3) covers verification and recording of audit notes, covering ITC availed and utilised, turnover, exemptions, rate of tax and refund. Rule 101(4) allows the officer to inform discrepancies, the person to reply, and findings to be finalised after due consideration of the reply. Rule 101(5) requires findings to be informed in ADT-02 on conclusion. ADT-03 and ADT-04 relate to special audit.

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