Rule 101 - Audit
CGST Rules, 2017
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Finin2min Summary - Rule in 2 Minutes
Current audit rule: period may be a financial year, part thereof or multiples; ADT-01 notice, audit verification, discrepancy reply and ADT-02 findings.
Exact operative text
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.
Paragraph-wise decode
Current audit rule: period may be a financial year, part thereof or multiples; ADT-01 notice, audit verification, discrepancy reply and ADT-02 findings.
Section-Rule-Form-Notification bridge
No direct Rule certified in Phase 1. Check notifications, circulars, forms and corresponding State law.
The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments certified in this phase.
Practical example
Apply the rule to the relevant form, period, portal event and evidence trail before reaching a compliance conclusion.
Professional alert
Verify the latest official active Rule page, amending Gazette and portal version before filing or advising.
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 rule 101 regulate?
- It regulates audit. Read the exact text, conditions, exceptions and transaction date together.
- Which subordinate law should be checked?
- No direct CGST Rule has been certified in this phase. 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.