What does section 66 regulate?

It regulates special audit. Read the exact text, conditions, exceptions and transaction date together.

Which subordinate law should be checked?

Rule 102. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.

What evidence should be retained?

Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.

Can portal behaviour override the statute?

No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

Section 66 - Special audit

Chapter XIII - Audit

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Finin2min Summary - Section in 2 Minutes

Permits a special audit by a nominated chartered accountant or cost accountant where value is not correctly declared or credit is abnormally availed and the case is complex/revenue-sensitive. Assistant Commissioner rank or above may direct only with prior Commissioner approval. The nominated professional reports within ninety days, extendable by another ninety days. Taxpayer must receive opportunity before adverse use. Expenses, including remuneration, are determined and paid by the Commissioner.

Exact operative text

66. Special audit.-(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner. (2) The chartered accountant or cost accountant so nominated shall, within the period of ninety days, submit a report of such audit duly signed and certified by him to the said Assistant Commissioner mentioning therein such other particulars as may be specified: Provided that the Assistant Commissioner may, on an application made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, extend the said period by a further period of ninety days. (3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force. (4) The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of special audit under sub-section (1) which is proposed to be used in any proceedings against him under this Act or the rules made thereunder. (5) The expenses of the examination and audit of records under sub-section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determination shall be final. (6) Where the special audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74 or section 74A.

Paragraph-wise decode

Section-Rule-Form-Notification bridge

Rule 102

The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments certified in this phase.

Practical example

Complex multi-state valuation and unusually high ITC lead to ADT-03 special audit; the taxpayer supplies ledgers and challenges unsupported assumptions before final use.

Professional alert

A special audit can be ordered even if accounts were audited under another law, but the statutory preconditions and approval must be evidenced.

CGST Rules - rule by rule The rule text layer is paired with a current amendment/control note. Forms and portal labels may change; use the latest official utility. Rule 101 RULE TEXT / CONSOLIDATED BASE LAYER 101. Audit.-(1) The period of audit to be conducted under sub-section (1) of section 65 shall be a financial year or part thereof244 or multiples thereof. (2) Where it is decided to undertake the audit of a registered person in accordance with the provisions of section 65, the proper officer shall issue a notice in FORM GST ADT-01in accordance with the provisions ofsub-section (3) of the said section. (3) The proper officer authorised to conduct audit of the records and the books of account of the registered person shall, with the assistance of the team of officers and officials accompanying him, verify the documents on the basis of which the books of account are maintained and the returns and statements furnished under the provisions of the Act and the rules made thereunder, the correctness of the turnover, exemptions and deductions claimed, the rate of tax applied in respect of the supply of goods or services or both, the input tax credit availed and utilised, refund claimed, and other relevant issues and record the observations in his audit notes. (4) The proper officer may inform the registered person of the discrepancies noticed, if any, as observed in the audit and the said person may file his reply and the proper officer shall finalise the findings of the audit after due consideration of the reply furnished. (5) On conclusion of the audit, the proper officer shall inform the findings of audit to the registered person in accordance with the provisions of sub-section (6) of section 65 in FORM GST ADT-02. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Current audit rule: period may be a financial year, part thereof or multiples; ADT-01 notice, audit verification, discrepancy reply and ADT-02 findings. Rule 102 RULE TEXT / CONSOLIDATED BASE LAYER 102. Special Audit.-(1) Where special audit is required to be conducted in accordance with the provisions of section 66, the officer referred to in the said section shall issue a direction in FORM GST ADT-03to the registered person to get his records audited by a chartered accountant or a cost accountant specified in the said direction. (2) On conclusion of the special audit, the registered person shall be informed of the findings of the special audit in FORM GST ADT-04. 244 Inserted vide Notf no. 74/2018-CT dt. 31.12.2018 CHAPTER XII ADVANCE RULING CURRENT OPERATIVE CONTROL AT 29 JUNE 2026

Special audit direction in ADT-03; nominated CA/CMA reports in ADT-04 within statutory timeline.

Notifications, circulars and implementation controls Instrument Date/status Why it matters CGST Act consolidation As on 11 June 2026 Sections 65-66 including current cross-reference to section 74A. CGST Rules 101-102 Active rules ADT-01 to ADT-04 audit and special-audit forms. Instruction 02/2023-GST 26 May 2023 Guidelines for special all-India drive and verification; use only for its stated context. CBIC Audit Manual / Commissionerate SOPs Administrative Operational planning does not override Act, Rules or natural justice. Reading rule: A circular guides administration but cannot override the Act, Rules or Gazette. Always read the principal instrument with amendments and effective-date clauses.

CA / finance / professional case studies Case 1: Audit notice with short lead time Facts: ADT-01 allows only eight working days. Question: Is the schedule compliant? Analysis: Section 65 ordinarily requires at least fifteen working days. Seek rescheduling in writing while preserving cooperation and limitation facts. References: s.65(3); r.101 Case 2: Audit finding versus demand Facts: ADT-02 quantifies ITC mismatch. Question: Must it be paid immediately? Analysis: ADT-02 communicates findings; an enforceable demand requires the applicable statutory proceeding, hearing and order unless voluntarily admitted and paid. References: s.65(6)-(7); ss.73/74/74A Case 3: Special audit without approval evidence Facts: An Assistant Commissioner directs special audit. Question: What should be checked? Analysis: Request the direction, scope, nominated professional and confirmation of prior Commissioner approval; challenge jurisdiction without obstructing lawful audit. References: s.66(1); r.102

Case 4: ERP reconstruction Facts: Old transactional tables were migrated. Question: How should audit evidence be presented? Analysis: Provide reconciled source-to-return bridge, migration controls, immutable extracts, sample invoices and exception logs. References: s.65; r.101 Case 5: Multiple financial years Facts: Audit covers a part-year and two full years. Question: Is that possible? Analysis: Rule 101 permits a financial year or part thereof or multiples, subject to valid notice/scope. References: r.101(1) Case 6: Adverse special-audit conclusion Facts: Nominated auditor assumes all common credit is ineligible. Question: Can officer adopt it directly? Analysis: No adverse material should be used without opportunity; submit factual allocation and legal rebuttal before adjudication. References: s.66(5)-(6) Case 7: Audit extension Facts: Three months expire. Question: Can audit continue? Analysis: Commissioner may extend by up to six months for recorded reasons; verify commencement date and extension order. References: s.65(4)

Case 8: Confidential third-party records Facts: Audit asks for customer contracts with sensitive data. Question: How to comply? Analysis: Supply relevant records with confidentiality markings/redaction of irrelevant data and a complete index; do not withhold legally relevant material. References: s.65(5); s.158

Finin2min Q&A 1. Is GST audit under section 65 the same as statutory financial audit? No. It is a tax-authority audit under CGST law. 2. How much notice is required? At least fifteen working days ordinarily under section 65(3). 3. What is audit commencement? The later statutory event linked to availability of records or actual institution at business place, as defined in the explanation. 4. Can audit cover part of a year? Yes. Rule 101 expressly permits a financial year or part thereof. 5. Can audit findings directly create recovery? No; lawful demand/order and recovery framework must follow unless admitted payment is made. 6. Who can order special audit? An officer not below Assistant Commissioner, with prior Commissioner approval. 7. Who selects the special auditor? The Commissioner nominates the CA or CMA. 8. Who pays special-audit cost? Commissioner determines and pays expenses/remuneration. 9. Is hearing required before adverse use? Yes, where material is proposed to be used adversely. 10. Can another-law audit prevent special audit? No. 11. What should finance reconcile first? Turnover, rate/exemption, ITC, refunds, e-invoices/e-way bills and ledgers. 12. What is the key final document? ADT-02 communicates section 65 audit findings; ADT-04 is special-audit report.

Official source register Source Control purpose India Code - Central Goods and Services Tax Act, 2017 https://www.indiacode.nic.in/handle/123456789/15689 Official consolidated Act and amendment/commencement history. CBIC Tax Information Portal - active GST Act and Rules https://taxinformation.cbic.gov.in/ Active provision text, forms and linked amendment history. GST Council - Central Tax notifications https://gstcouncil.gov.in/cgst-tax-notification Gazette amendment instruments and effective dates. GST Council - CGST circulars https://gstcouncil.gov.in/cgst-circulars Administrative clarifications and implementation guidance. GSTAT official portal https://www.gstat.gov.in/ Bench, notices, procedure rules, orders and current institutional status. GSTAT e-Filing portal https://efiling.gstat.gov.in/ Current appeal filing manuals, acknowledgements and Presidential orders. Professional use: Preserve the source PDF/HTML, Gazette date, portal ARN, working papers and management approval supporting every material GST position. © 2026 Finin2min. All rights reserved. Educational and professional reference only; not a substitute for transaction-specific legal or tax advice. Verify latest Gazette, applicable State law and judicial developments before reliance. Authors: CA Nikhil Gupta and Kajri Singh.

F2 Finin2min GST BARE ACT & RULES SERIES · CHAPTER XIV Inspection, Search, Seizure and Arrest Reasons-to-believe controls, search authorisation, seizure/release, summons, arrest, premises access and goods in movement. Legal cut-off 29 June 2026 Act as on 11 June 2026 GST26

Chapter control panel Statutory coverage Sections 67, 68, 69, 70, 71, 72 Rule coverage Rules 138, 138A, 138B, 138C, 138D, 139, 140, 141 Legal source hierarchy Act → Rules → Gazette notifications → binding judicial law → circulars/advisories. State overlay Use corresponding SGST/UTGST law, State notifications and local jurisdiction controls. Editorial control: The complete official section text is reproduced from the India Code consolidation. Rule cards use the official consolidated base text plus a separately identified current operative control for amendments after the base compilation. The current Gazette/active-rule page prevails.

Senior finance & tax decision flow 1 Identify statutory power and rank of authorising officer ↓ 2 Record and preserve authorisation/warrant details ↓ 3 Nominate response team and independent document custodian ↓ 4 Protect privilege, originals and forensic chain of custody ↓ 5 Separate voluntary statement from compelled evidence ↓ 6 Track seizure inventory, prohibition and release timelines ↓ 7 Reconcile e-way bill and physical movement evidence ↓ 8 Escalate arrest/summons issues with immediate legal review

Bare Act - paragraph by paragraph Read the statutory text first, then the practical interpretation, example and risk control.

Implementation checklist

Fix the transaction, taxable period and jurisdiction.
Read every subsection, proviso, explanation and omission marker.
Open the mapped Rule, form, notification and circular.
Test State/UT variation and portal version.
Preserve evidence, approvals, working papers and acknowledgements.
Record the conclusion, assumptions, source date and reviewer.

Evidence and retention checklist

Contract, purchase order, invoice or underlying transaction document.
Registration, return, ledger, challan and portal acknowledgement.
Official Act/Rule/notification version used and effective date.
Internal tax position paper, computation and management approval.
Correspondence, notices, replies, orders and appeal papers where applicable.

Practical Q&A

What does section 66 regulate?: It regulates special audit. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?: Rule 102. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
What evidence should be retained?: Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
Can portal behaviour override the statute?: No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

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