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CA Final · Indirect Tax Laws · Assessment and Audit

Sundaram Textiles Pvt Ltd, registered in Tamil Nadu, receives a notice in FORM GST ADT-01 informing it that its records will be audited by the proper officer under section 65. The notice covers the period 1 October 2024 to 31 March 2025 only. Under Rule 101, is the audit period valid?

The audit period is valid. Rule 101(1) provides that the period of audit under section 65 shall be a financial year or part thereof or multiples thereof, so a six-month period within a financial year is permissible without any consent from the registered person.

  1. ANo, because the audit period must always be a complete financial year or multiples thereof
  2. BYes, because the period of audit may be a financial year or part thereof or multiples thereofCorrect
  3. CNo, because audit can be conducted only for a period of at least two financial years
  4. DYes, but only if the registered person consents in writing to a part-year audit

Explanation

Rule 101(1) says the audit period is a financial year or part thereof or multiples thereof. Six months is part of a financial year, so it is valid. The first option ignores the words 'or part thereof' inserted in 2018 and is wrong. No consent is required.

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