Section 66 of The Central Goods and Services Tax Act, 2017
- (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 1[or section 74A].
Summary
- The most important thing Section 66 of the Central Goods and Services Tax Act of 2017 does is allow a tax officer to order a special audit of a business by an independent accountant.
- This happens if an Assistant Commissioner or higher believes the business incorrectly declared the value of its goods or claimed abnormal tax credits.
- The officer needs prior approval from the Commissioner to order this special audit.
- The Commissioner appoints a specific chartered accountant or cost accountant to examine the records and submit a report within ninety days.
- This ninety day deadline can be extended by another ninety days if there is a good reason.
- The tax department pays the fees and expenses for this special accountant, so the business does not have to pay them.
- The business owner has the right to be heard before any findings from this special audit are used against them.
Practical examples
FAQ
1. Under Section 66 of The Central Goods and Services Tax Act of 2017, who pays for the special audit?
Under Section 66 of The Central Goods and Services Tax Act of 2017, the expenses of the examination and the accountant's remuneration are determined and paid by the Commissioner.
2. How much time does the auditor have to finish a special audit under Section 66 of the CGST Act?
According to Section 66 of the CGST Act, the auditor must submit the report within ninety days, which can be extended by a further period of ninety days if needed.
3. Can a special audit under Section 66 of the GST law happen even if my books were already audited?
Yes, under Section 66 of the GST law, a special audit can be ordered even if the taxpayer's accounts have already been audited under any other law.
Test yourself
Q1.Under Section 66 of The Central Goods and Services Tax Act, 2017, whose prior approval is required before an Assistant Commissioner can direct a taxpayer to get a special audit?
Q2.According to Section 66 of The Central Goods and Services Tax Act, 2017, what kind of professional must be nominated to conduct the special audit?
Q3.Under Section 66 of The Central Goods and Services Tax Act, 2017, how long is the initial period granted to the accountant to submit the special audit report?
Q4.Both Section 65 and Section 66 of The Central Goods and Services Tax Act, 2017 deal with audits. How do they differ regarding who performs the audit?