What Is the GST Audit Limit in 2026?
Last updated: 23 October 2026
Quick Answer: The GST audit limit is no longer an audit trigger: no chartered accountant (CA) audit has been mandatory since 1 August 2021. After the Finance Act, 2021 omitted section 35(5), the ₹5 crore aggregate turnover limit decides only who files a self-certified GSTR-9C. Taxpayers up to ₹2 crore need no GSTR-9; section 65 departmental audits can reach any registered person.
A GST audit is an examination of a registered person's records, returns and documents to verify turnover, tax paid, refunds and input tax credit, under section 2(13) of the Central Goods and Services Tax Act, 2017 (CGST Act).
Does any turnover still make a GST audit mandatory for FY 2025-26?
No. No turnover level triggers a compulsory chartered accountant's GST audit for FY 2025-26. Section 110 of the Finance Act, 2021 omitted section 35(5) of the CGST Act with effect from 1 August 2021, and Notification 30/2021-Central Tax replaced the audited GSTR-9C with a self-certified statement.
Notification 29/2021-Central Tax, dated 30 July 2021, brought the omission into force. Many guides still quote a "₹2 crore GST audit limit", which describes the law before that date.
Three kinds of review remain:
- Departmental audit under section 65, started by the Commissioner or an authorised officer.
- Special audit under section 66, by a chartered accountant or cost accountant nominated by the Commissioner.
- Voluntary GST compliance review, often called a GST health check, which the company commissions for itself.
GST audit applicability for a company is therefore about its annual return, its reconciliation statement and its exposure to a departmental audit.
What are the GSTR-9 and GSTR-9C turnover limits?
For FY 2025-26, GSTR-9 applicability starts above ₹2 crore of aggregate turnover, and GSTR-9C applicability above ₹5 crore. Both are due by 31 December 2026 under rule 80 of the CGST Rules, 2017. These are filing limits, not audit limits:
| Requirement | Before 1 August 2021 | From 1 August 2021 |
|---|---|---|
| Audit of accounts by a chartered accountant or cost accountant | Required above the rule 80(3) turnover limit, under section 35(5) | Omitted by the Finance Act, 2021; no turnover triggers it |
| GSTR-9C reconciliation statement | Certified by the auditor | Self-certified by the taxpayer, above ₹5 crore |
| Departmental audit (section 65) and special audit (section 66) | Could be ordered at any turnover | Can still be ordered at any turnover |
The ₹2 crore GSTR-9 exemption comes from Notification 15/2025-Central Tax, dated 17 September 2025, and applies from FY 2024-25 onwards.
How is aggregate turnover counted for the GST audit turnover limit?
Aggregate turnover is the all-India value of taxable supplies, exempt supplies, exports and inter-State supplies of every registration under the same Permanent Account Number (PAN), excluding the GST and cess charged. Section 2(6) of the CGST Act sets this definition.
Exempt supplies and exports count towards it, and inward supplies taxed under reverse charge do not. The GST audit limit for FY 2025-26 is therefore tested on net-of-tax supply values from the books, reconciled to GSTR-1 and GSTR-3B.
When do the e-invoicing and e-way bill thresholds apply?
E-invoicing applies once aggregate annual turnover has exceeded ₹5 crore in any preceding financial year from 2017-18, under Notification 10/2023-Central Tax from 1 August 2023, unless Notification 13/2020-Central Tax exempts its class, such as Special Economic Zone units.
E-way bills apply to movements of goods with a consignment value above ₹50,000 under rule 138(1) of the CGST Rules, 2017, subject to the exemptions in rule 138(14). Goods sent to a job worker in another State need an e-way bill whatever their value. For movement within Maharashtra, Notification 15E/2018-State Tax exempts consignments up to ₹1 lakh.
IRNs are generated on an Invoice Registration Portal (IRP), such as the government-run e-invoice system of the National Informatics Centre. Each business-to-business (B2B) invoice from a covered company carries an Invoice Reference Number (IRN) and QR code.
What happens in a departmental or special GST audit?
A departmental audit under section 65 is a review by GST officers, at the company's premises or in their office, after at least 15 working days' notice in FORM GST ADT-01. A special audit under section 66 is ordered by an officer not below Assistant Commissioner, with the Commissioner's approval, where the value appears wrongly declared or the credit beyond normal limits.
What is the GST audit by department time limit?
Section 65(4) requires a departmental audit to finish within three months of its commencement, extendable by up to six more months by the Commissioner. Commencement is the later of the date records are made available and the start of audit at the place of business. The officer may first share the discrepancies, and the company may reply under rule 101(4); findings then reach it in FORM GST ADT-02 within 30 days of the audit's conclusion.
Rule 101(1) lets one audit cover one or more financial years; the limit falls on the demand, since a section 74A notice for FY 2024-25 onwards must issue within 42 months of the annual return due date.
What follows if the audit finds short-paid tax?
Under section 65(7), detected short payment or wrongly availed credit may lead to action under section 73 or 74 for periods up to FY 2023-24, and under section 74A from FY 2024-25. The tax is demanded with interest under section 50. As of October 2026, section 74A(5) sets the penalty at 10% of the tax or ₹10,000, whichever is higher, or equal to the tax where fraud, wilful misstatement or suppression is involved.
In a non-fraud case, paying the tax and interest within 60 days of the notice, or before it with written intimation to the officer, avoids the penalty under section 74A(8). Section 74A(11) still applies the section 74A(5)(i) penalty where self-assessed or collected tax was not paid within 30 days of its due date.
How does a special audit differ?
Under section 66(2), the nominated accountant reports within 90 days, extendable by another 90 days, and the Commissioner pays the audit fee under section 66(5). Rule 102 sets the forms: FORM GST ADT-03 for the direction, ADT-04 for the findings. The company must be heard before the findings are used against it.
What does a GST compliance review cover for a mid-size Mumbai company?
A GST compliance review for a mid-size Mumbai company tests its Maharashtra registration, returns, input tax credit, e-invoices and e-way bills against its books for the year. No statute prescribes the review, so the company sets its scope.
The review covers four blocks: the Maharashtra Goods and Services Tax Identification Number (GSTIN) and other registrations, outward supplies, input tax credit including Invoice Management System actions, and e-invoices, e-way bills and annual returns.
For manufacturing companies with stock at job workers or depots, the review also matches stock records to returns.
GST Compliance Review Checklist for FY 2025-26
This checklist covers a full-year GST compliance review for a company that files GSTR-9, and GSTR-9C above ₹5 crore.
Registration, turnover and return tests
| Area | Test | Evidence | Reference |
|---|---|---|---|
| Registration | Every State from which the company makes taxable supplies is registered, and every place of business is on the certificate | GST registration certificates, list of premises | CGST Act s.22, s.24, s.25 |
| Turnover test | Aggregate turnover computed at PAN level against ₹2 crore and ₹5 crore | Trial balances of all registrations | CGST Act s.2(6); rule 80 |
| Outward supplies | Sales register agrees with GSTR-1 month by month | Sales register, GSTR-1 | CGST Act s.37 |
| Rate change | Supplies that straddle 22 September 2025 take the rate fixed by the time of supply under section 14 | Sales register, invoices, credit notes | CGST Act s.14; Notification 9/2025-Central Tax (Rate) (goods); Notification 15/2025-Central Tax (Rate) (services) |
| Tax paid | Liability in GSTR-1 agrees with GSTR-3B and the cash and credit ledgers | GSTR-3B, electronic ledgers | CGST Act s.39, s.49 |
| Annual filing | GSTR-9 and GSTR-9C reconciled to audited financial statements before 31 December 2026 | Draft GSTR-9 and GSTR-9C, audited accounts | CGST Act s.44; rule 80 |
Input tax credit tests
| Area | Test | Evidence | Reference |
|---|---|---|---|
| Credit match | Every credit claimed appears in GSTR-2B | Purchase register, GSTR-2B | CGST Act s.16(2)(aa) |
| Blocked credits | No credit on items listed in section 17(5) | Expense ledgers, fixed asset register | CGST Act s.17(5) |
| Supplier payment | Credit reversed where a supplier is unpaid after 180 days | Creditor ageing | CGST Rules, rule 37 |
| Credit cut-off | No credit for FY 2025-26 claimed after 30 November 2026 | GSTR-3B for October and November | CGST Act s.16(4) |
| Reverse charge | Tax paid on reverse charge supplies, and credit taken only after payment | Reverse charge mechanism (RCM) register, GSTR-3B | CGST Act s.9(3), s.9(4); CGST Rules, rule 36(1)(b) |
E-invoice and e-way bill tests
| Area | Test | Evidence | Reference |
|---|---|---|---|
| E-invoicing | Every B2B invoice carries an IRN where the ₹5 crore test was crossed in any preceding year since 2017-18, and at ₹10 crore or more is reported on the IRP within 30 days of its date | IRP reports, sales register | CGST Rules, rule 48(4); IRP 30-day reporting limit (from 1 April 2025) |
| E-way bills | Every inter-State movement above ₹50,000, every inter-State dispatch to a job worker whatever its value, and every intra-Maharashtra movement above ₹1 lakh has an e-way bill matching an invoice or challan, unless rule 138(14) exempts it | E-way bill register, dispatch records | CGST Rules, rule 138; MGST Notification 15E/2018-ST |
Stock-related differences, such as closing stock in the books against supplies in the returns, are tested the same way as in a stock audit with GST reconciliation.
Common Mistakes in Applying the GST Audit Limit
Common mistakes in GST audit compliance come from old thresholds, a per-registration turnover test and confusion with the income-tax audit.
- Treating ₹2 crore as an audit trigger. It is now the GSTR-9 exemption line, not an audit threshold.
- Testing turnover per registration. The ₹5 crore GSTR-9C test and the e-invoicing test both use PAN-level aggregate turnover.
- Confusing the GST audit with the tax audit. The tax audit under section 44AB of the Income-tax Act, 1961 (section 63 of the Income-tax Act, 2025 from tax year 2026-27) is a separate audit with its own turnover tests.
An illustration: a Mumbai manufacturer with a depot in another state tests each registration separately, finds both below ₹5 crore and skips GSTR-9C. At PAN level its turnover exceeds ₹5 crore, so GSTR-9C applies for that year, and e-invoicing applies from the next 1 April, or already applies if an earlier year since 2017-18 crossed ₹5 crore.
How do companies get a GST compliance review done?
Companies get a GST compliance review done through their own finance team or through external chartered accountants and GST practitioners. An in-house review starts faster, while an external review brings independence before GSTR-9 and GSTR-9C are filed. For choosing that external firm, see accounting firms in India for SMEs.
HSAG Consulting lists GST and regulatory compliance reviews among its assurance services, and its tax team handles representation during GST audits and assessments. Any special audit under section 66 is still done by the accountant the Commissioner nominates.
Plan Your GST Compliance Review Before 31 December 2026
To scope a GST compliance review before your FY 2025-26 annual return is filed, leave your details on the contact page and the team will contact you.
