GST Audit Notice ADT-01: Documents and Response Plan

A GST auditor arrives with a fifteen-day notice and a document list, and most finance teams discover in that fortnight that their reconciliations were never really finished. The ADT-01 notice GST form itself says little, but the audit it starts under section 65 of the CGST Act, 2017 will test every position taken across two or three years of returns. The notice is not an accusation; it is a scheduled examination. What decides the outcome is whether your working papers exist before the officer asks for them. This is the sequence to follow, from the notice to the findings in ADT-02.

When the department initiates a GST audit

Section 65(1) of the CGST Act, 2017 allows the Commissioner, or an officer authorised by a general or specific order, to undertake an audit of any registered person. Rule 101(1) of the CGST Rules, 2017 directs that the audit be conducted with due regard to the nature and complexity of the case and the interest of revenue. Selection is therefore risk-based filtering of returns, not a finding of evasion.

Four processes get confused, and keeping them apart helps when you frame a reply:

• Scrutiny under section 61 — a desk review of returns, communicated in Form ASMT-10, with no visit and no audit report.
• Departmental audit under section 65 — the subject here, run by central or state audit formations.
• Special audit under section 66 — ordered in special circumstances and conducted by a chartered accountant or cost accountant nominated by the officer.
• Annual reconciliation under section 35(5) — the self-certified GSTR-9C you file; it is not an audit by the department.

The notice names the audit period, usually one to three financial years, and the formation conducting it. Central and state authorities coordinate their programmes, so confirm which one has issued the notice before allocating the file and briefing your team.

Inside the ADT-01 notice GST audit: contents and the response window

Rule 101(2) requires the proper officer to issue Form GST ADT-01 at least fifteen days before the audit commences. The form carries your GSTIN, the audit period, the name and designation of the audit officer, the date, time and place fixed for the audit, and the records called for.

Those fifteen days are a preparation window, not a reply deadline. The Rules prescribe no response to be filed within that period, and equally give you no right of adjournment. Silence is not a strategy.

How the three-month clock starts

Section 65(3) requires the audit to be completed within three months from the date of commencement, which the Commissioner may extend by up to six months. The Explanation to Rule 101 defines commencement as whichever is later: the date you make the records available, or the date the audit is actually instituted at your place of business. That definition cuts both ways. Producing a partial set early does not stop the clock, and holding everything back does not stop the officer from sitting with what you have produced.

Reply in writing within two working days. Acknowledge the notice, name one nodal officer with a phone number, propose a handover date with an index attached, and ask for the audit plan in advance so you know which years and which issues are in scope.

Records to prepare: ledgers, returns, reconciliations and invoices

Build one folder per financial year under audit, indexed to the numbered list in the notice. Three layers cover almost every request an audit team makes.

Returns and electronic ledgers

Keep GSTR-1, GSTR-3B, GSTR-9 and GSTR-9C for each year, with the electronic liability, credit and cash ledgers and the challans exported as PDFs, dated on download. The portal view changes as later periods are filed, so a dated export is your only record of what you actually saw when you filed.

Reconciliations

This is where audits are won. Have ready the GSTR-3B to GSTR-1 turnover reconciliation; GSTR-2B to purchase register; Table 8A of GSTR-9 to credit actually availed; the ITC register to the credit ledger; e-way bills to invoices to GSTR-1; and shipping bills to export invoices reported in GSTR-1. Add the reverse charge register for supplies notified under sections 9(3) and 9(4), reversals under Rules 42 and 43, and a schedule of credits blocked under section 17(5).

Invoices, contracts and supporting papers

Pull tax invoices, credit and debit notes, contracts with a rate of tax mapped to each line of supply, HSN and SAC classification notes, e-invoice references, job work challans in Form ITC-04, the fixed asset register wherever capital goods credit was taken, and stock records. Where a rate is disputed, the contract and the classification note carry the argument, not the invoice.

Before the officer's first visit:

• Index every document to the numbered list in the ADT-01 notice.

• Prepare a year-wise GSTR-3B versus GSTR-1 and GSTR-2B versus purchase register reconciliation, with an explanation column for each difference.

• Reconcile Table 8A of GSTR-9 with the credit ledger and note every gap.

• Compile the reverse charge register with evidence of tax paid on section 9(3) supplies.

• List all section 17(5) blocked credits and Rule 42 and Rule 43 reversals with workings.

• Keep originals in the office and issue certified copies against a signed handover memo.

• Brief the person who will sit through the audit and give the officer a single point of contact.

Responding to queries during the audit

Section 65(4) obliges you to give the officer the facility to verify your books and to appear before him or furnish information. Answer in writing on letterhead, with a covering letter that restates the question and refers to annexure numbers. Verbal explanations, however accurate, do not survive in the audit file.

Keep a query register: date received, the officer's exact question, date replied, documents furnished. Where an answer depends on data from a supplier, say so and commit to a date, then keep it. If an item is genuinely arguable, state your position with the statutory basis in the first reply. Vagueness invites a finding in ADT-02.

Common mistakes during a departmental audit

Handing over unindexed bundles, so the officer forms his own view of what the records show. Reversing ITC mid-audit without a working paper, which turns a reconciliation gap into an admission. Letting a junior sign replies on classification questions. And treating ADT-02 as the end of the matter when the demand follows separately under section 73 or 74.

Understanding ADT-02 findings

Rule 101 requires the officer to issue Form GST ADT-02, with the findings, within thirty days of completion of the audit. ADT-02 is not an order. It records what the audit found, and where a discrepancy is established the officer may proceed under section 73 for non-fraud cases or section 74 where suppression or misstatement is alleged. Classify each finding as agreed, arithmetically wrong, or disputed on law, and tie it back to a working paper before you reply.

Where tax is ascertained from evidence gathered in the audit, the officer may communicate it in Part A of Form GST DRC-01A before a show cause notice. If you accept the amount, pay through Form DRC-03 with interest under section 50 and intimate the payment in Part B within seven days. Amounts settled that way are generally not pursued through a notice.

A worked scenario

Suryanarayan Autocomp Private Limited, a Pune components maker with turnover of about ₹86 crore, received ADT-01 dated 12 May 2026 for 2022-23 and 2023-24. It handed over indexed records on 2 June 2026, which fixed the commencement date. Four draft findings emerged: excess ITC of ₹41,60,000 in GSTR-3B over GSTR-2B, traceable to suppliers uploading invoices late; reverse charge of ₹1,11,600 on ₹6,20,000 of fees billed by an advocate, never discharged; ITC of ₹3,80,000 on group health insurance for employees, blocked under section 17(5); and a ₹12,00,000 credit note the officer had not allowed.

The company paid ₹46,51,600 with interest at 18% through DRC-03 and filed Part B within seven days, closing the first three items without a notice. On the credit note it replied with the note, the linked e-invoice and the buyer's GSTR-2B showing the reduction, and demonstrated that the time limit in section 34(2) had been met. That item was dropped.

Closing the audit and handling follow-up notices

If nothing survives, ADT-02 closes the audit for that period. If a demand follows, expect a show cause notice in Form DRC-01, your reply in Form DRC-06, a personal hearing, and an order summarised in Form DRC-07. Appeal lies to the appellate authority under section 107 within three months, with a pre-deposit of 10% of the remaining disputed tax. Confirm whether the demand rests on section 73 or section 74 before you settle the amount, because penalty exposure differs sharply between them.

Section 36 requires records to be retained for seventy-two months from the due date of furnishing the annual return for the year concerned. Keep the ADT-01, ADT-02, every DRC form, acknowledgements and the query register for that period, in the same structure you used for the audit itself.

One next step: pull the ADT-01, confirm the audit period and the issuing formation, and block two working days for your accounts team to build the year-wise reconciliation file before the fifteen-day window closes.

This article is for general information only and is not legal advice. Consult a qualified professional for your specific facts.