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CA Final · Indirect Tax Laws · Assessment and Audit

Sunrise Textiles Pvt Ltd, a registered person in Surat, has been selected for audit under section 65 of the CGST Act. The proper officer wants to audit only the period October 2023 to March 2024 (part of FY 2023-24). Under the CGST Rules, 2017, which statement about the period of audit is correct?

The audit period under rule 101(1) may be a financial year, a part of a financial year, or multiples of a financial year. Hence the officer can validly audit October 2023 to March 2024, because the rule expressly permits a part of a financial year.

  1. AThe audit period must be a full financial year or multiples thereof, with no part-year allowed
  2. BThe audit period can be a financial year, part thereof, or multiples of a financial yearCorrect
  3. CThe audit period can be only a calendar quarter
  4. DThe audit period must always be the preceding five financial years

Explanation

Rule 101(1) provides that the period of audit shall be a financial year or part thereof or multiples thereof. The words 'or part thereof' were inserted from 31.12.2018, so a six-month period is permissible. The option requiring a full year ignores this insertion.

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