Special audit
Section 66, CGST Act
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Section 66 provides for a SPECIAL AUDIT – during proceedings, if the officer doubts the value or ITC, he can, with approval, direct the taxpayer to get accounts audited by a nominated chartered/cost accountant, at government expense.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Only an officer not below Assistant Commissioner, with the prior approval of the Commissioner, can direct a special audit, and only where the value or the credit appears wrong having regard to the nature and complexity of the case.
Direction in ADT-03; report in ADT-04 within ninety days, extendable by ninety more. The auditor’s fee is paid by the department.
A special audit can be ordered even if the accounts were already audited under any other law – but the taxpayer must be heard before the material is used against him.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
2,193 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
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(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] .
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
date not stated · Inserted
Inserted by section 134 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
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Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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