A GST ADT-01 notice under Rule 101(2) is an official audit notice issued by a GST officer to a registered taxpayer, informing them that their accounts and records will be examined. If you have received one, you typically have 15 working days to respond and must comply fully or face penalties under Section 74 of the CGST Act, 2017. This notice applies to any GST-registered business, including proprietorships, private limited companies, and LLPs. The key trade-off: cooperating thoroughly reduces penalty risk, while ignoring or partially responding can trigger demand notices and interest liability.

• ADT-01 is issued under Section 65 of the CGST Act, 2017 read with Rule 101(2) of the CGST Rules, 2017.
• The notice specifies the audit period, the date of audit commencement, and the documents required.
• Non-compliance can attract penalties up to 100% of tax dues under Section 74 for fraud or wilful misstatement.

What is a GST ADT-01 Notice?

GST ADT-01 is the prescribed format for an audit notice issued by a proper officer of the GST department. It is governed by Section 65 of the Central Goods and Services Tax (CGST) Act, 2017 and Rule 101(2) of the CGST Rules, 2017. The notice is sent to inform a registered taxpayer that a departmental audit of their books of accounts, records, and returns has been ordered.

Unlike a scrutiny notice (ASMT-10) or a demand notice (DRC-01), the ADT-01 specifically initiates a formal audit process. The GST officer will examine whether the tax paid, input tax credit (ITC) claimed, and filings made are accurate and consistent with actual business transactions.

Legal Basis: Section 65 and Rule 101(2)

Section 65 of the CGST Act, 2017 empowers the Commissioner or any officer authorised by the Commissioner to carry out an audit of any registered person. The audit can be conducted at the taxpayer's place of business or at the office of the GST department.

Rule 101(2) of the CGST Rules, 2017 prescribes the procedure and form for issuing the audit notice. The proper officer must issue ADT-01 at least 15 working days prior to the commencement of audit, giving the taxpayer adequate time to prepare documents and records.

Key statutory provisions you must know:

• Section 65(1): Commissioner's power to conduct audit.
• Section 65(3): Obligation of the taxable person to facilitate the audit and produce necessary documents.
• Section 65(6): Officer must communicate audit findings within 30 days of conclusion of audit using form ADT-02.
• Section 65(7): If discrepancies are found, officer can initiate demand proceedings under Section 73 or Section 74.
• Rule 101(2): Mandates advance notice of at least 15 working days before audit commencement.

Who Receives GST ADT-01?

Any GST-registered taxpayer can receive an ADT-01 notice. However, the department typically targets businesses that show one or more of the following patterns:

• High ITC claims inconsistent with purchase data on GSTR-2B.
• Significant mismatch between GSTR-1 (outward supplies) and GSTR-3B (summary return).
• Businesses with turnover above the audit threshold under Section 35(5) (currently applicable to taxpayers with turnover exceeding Rs. 2 crore for financial year audit).
• Specific sectors flagged by the GSTN risk engine, such as exporters claiming IGST refunds, works contract service providers, and real estate developers.
• Companies where third-party data (TDS, TCS, banking transactions) does not match GST filings.
• Businesses flagged during a risk-based selection process run by the GST Council.

Even businesses with a clean compliance history can be selected if the system flags an anomaly or if a sector-wide audit drive is launched.

Key Details in the ADT-01 Notice

When you receive an ADT-01, carefully check the following information mentioned in the notice:

Field in ADT-01	What to Verify
Name and GSTIN of taxpayer	Confirm it matches your registered details exactly.
Audit period	Note the financial year(s) under audit.
Date of commencement of audit	You have at least 15 working days from notice date.
Place of audit	Either your premises or the department office.
Documents required	Prepare all listed books, invoices, returns, and reconciliations.
Name of authorised officer	Note the officer's designation and jurisdiction for correspondence.

How to Respond to ADT-01: Step-by-Step

Responding correctly to a GST ADT-01 notice is critical. Follow this structured process:

1. Acknowledge and do not ignore: Ignoring the notice leads to audit by obstruction and may trigger penalty provisions under Section 125 (general penalty up to Rs. 25,000).
2. Reconcile your GST returns: Cross-check GSTR-1, GSTR-3B, and GSTR-9/9C for the audit period. Identify and document any mismatches proactively.
3. Gather all mandatory documents: These include purchase and sales ledgers, ITC registers, tax invoices (inward and outward), e-way bill logs, bank statements, and annual financial statements.
4. Prepare a reconciliation statement: Map GSTR-1 data with accounting records and GSTR-3B. Prepare GSTR-9C (reconciliation statement) if not already filed.
5. Appoint an authorised representative: A Chartered Accountant or GST practitioner can represent you during the audit proceeding. This is highly recommended for businesses with complex transactions.
6. Submit a written response: If you need an extension or want to shift the audit location, respond in writing to the officer within 5-7 working days of receiving ADT-01.
7. Cooperate fully during audit: Section 65(3) makes it a legal obligation to provide documents, give information, and assist the audit team.
8. Address ADT-02 findings promptly: After audit, the officer issues ADT-02 with observations. Respond with explanations and, if applicable, pay any shortfall along with interest under Section 50 to avoid further demand notices.

Documents Required for GST Audit

Prepare the following documents before the audit date:

• GST returns: GSTR-1, GSTR-2B, GSTR-3B, GSTR-9, and GSTR-9C for the audit period.
• Purchase register and sales register with HSN/SAC-wise breakup.
• All tax invoices, debit notes, credit notes issued and received.
• ITC reconciliation with GSTR-2B and purchase ledger.
• E-way bill report for the audit period.
• Bank statements for all business accounts.
• Audited financial statements (Balance Sheet, Profit and Loss Account).
• Stock register and inventory records (especially for manufacturing businesses).
• Import-export documentation if dealing in cross-border supply.
• LUT (Letter of Undertaking) if claiming zero-rated supplies without payment of IGST.
• Contracts and agreements for works contracts, leases, or job work arrangements.

Common Issues Found During GST ADT-01 Audits

Based on typical audit findings, the following discrepancies are most frequently raised by GST officers:

Issue	Risk	Provision Invoked
ITC claimed on ineligible goods/services	Tax demand + interest + penalty	Section 17(5), Section 73/74
ITC claimed without corresponding GSTR-2B reflection	Reversal of ITC + 18% interest	Section 16(2)(c), Rule 36(4)
Output tax underreported in GSTR-3B vs GSTR-1	Demand for differential tax + interest	Section 73/74
Reverse charge mechanism (RCM) not discharged	Tax demand + 18% interest	Section 9(3), Section 9(4)
E-way bill non-compliance	Penalty equal to tax amount	Rule 138, Section 129
GST on advances not declared	Interest on delayed payment	Section 12/13, Rule 50

Penalties for Non-Compliance with ADT-01

Failing to respond or cooperate with a GST audit can have serious financial consequences:

• Section 73 (no fraud): Tax demand plus interest at 18% per annum. Penalty up to 10% of tax due or Rs. 10,000, whichever is higher.
• Section 74 (fraud or wilful misstatement): Tax demand plus interest at 18% per annum. Penalty up to 100% of tax dues.
• Section 125 (general penalty): Up to Rs. 25,000 for any contravention not specifically covered elsewhere, including obstruction of audit.
• Interest under Section 50: 18% per annum on unpaid tax; 24% per annum on ITC wrongly availed and utilised.

Early voluntary disclosure and payment of dues before the audit officer raises a formal demand can significantly reduce penalties. Under Section 73, if dues are paid before the issuance of a Show Cause Notice (SCN), the penalty is nil.

ADT-01 vs Other GST Notices: Key Differences

Notice Type	Purpose	Governing Provision	Response Time
ADT-01	Audit notice (accounts and records inspection)	Section 65, Rule 101(2)	15 working days advance notice given
ASMT-10	Scrutiny of returns (specific discrepancy)	Section 61	As specified in notice (typically 30 days)
DRC-01	Show Cause Notice for demand of tax	Section 73/74	Typically 30 days
CMP-05	Notice to composition taxpayer for excess supply	Section 10	As specified in notice
REG-17	Show Cause Notice for cancellation of registration	Section 29	7 working days

How Taxocity Helps with GST ADT-01 Notices

Taxocity, with over three decades of experience in tax compliance and business advisory, provides end-to-end support for GST audit proceedings. Our team of real human experts, not chatbots, handles your ADT-01 response from document preparation to audit representation.

Our GST audit support includes:

• Complete reconciliation of GSTR-1, GSTR-3B, GSTR-2B, and GSTR-9/9C for the audit period.
• Identification and voluntary rectification of discrepancies before the audit date to minimise penalty risk.
• Preparation of all documents and responses required by the audit officer.
• Representation before GST officers during the audit proceeding.
• Advisory on ITC eligibility, RCM compliance, and HSN classification to prevent recurring issues.
• Post-audit support including ADT-02 response and, if required, demand notice representation.

Our 100% compliance guarantee means we take ownership of the process, ensuring you never miss a deadline or overlook a critical document. Rated 4.8/5 from 5,000+ reviews, Taxocity's GST experts are available to guide you at every step.

For ongoing GST compliance, explore our GST Filing service and GST Registration service to ensure your business stays audit-ready year-round.

Key Takeaways

1. GST ADT-01 is an audit notice under Section 65 of the CGST Act, 2017 read with Rule 101(2) of the CGST Rules, 2017.
2. You must be informed at least 15 working days before the audit commences.
3. Cooperation is mandatory by law; obstruction can result in a general penalty of up to Rs. 25,000.
4. Reconcile GSTR-1, GSTR-3B, and GSTR-2B proactively before the audit date.
5. Voluntarily paying any tax shortfall before the Show Cause Notice stage can reduce your penalty to nil (Section 73 cases).
6. Always appoint a qualified GST expert or CA to represent you in the audit proceedings.
7. After the audit, respond to ADT-02 findings within the stipulated time to avoid escalation to demand notices.

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Disclaimer: This article is intended for informational purposes only and does not constitute tax advice. GST laws and rules are subject to change. Please consult a qualified tax advisor or Chartered Accountant before taking any action based on this content.