Maharashtra has changed how it picks businesses for GST audits. The Commissioner of State Tax issued instructions dated 30 October 2026. They move audit selection for FY 2023-24 from a risk-based model to a risk-assessment-based model. Therefore, taxpayers should understand the new approach before notices arrive.
Why the Department Changed Its Approach
Earlier, data analytics flagged risky taxpayers, and those flags drove most selections. However, a flag only signals possible trouble. It does not prove a revenue loss.
The new framework asks officers to verify the risk first. As a result, audits should target real issues rather than statistical noise. These audits fall under Section 65 of the GST Act.
How Risk Assessment Differs From Risk Flags
Risk-based selection relies mainly on system-generated indicators. Risk-assessment-based selection goes further, because officers must study the case in detail. Consequently, they must identify specific audit issues and estimate the revenue at stake.
Reports say the Department has sent 3,258 cases for desk review. A desk review means officers examine records without visiting the business. Moreover, only cases that survive this review move forward.
The Role of Data Analytics
Data analytics still matters under the new system. The central team uses analytics to identify risk during selection. Nevertheless, analytics now serves as a starting point rather than the final word.
Revenue Thresholds Limit Selection
The instructions also set revenue-risk thresholds. Cases below the prescribed threshold would ordinarily not qualify for recommendation, unless another selection mechanism covers them. Thus, small-value risks should see fewer audits.
Still, the final outcome depends on the review. The quality of the desk review and the strength of the identified risk areas will decide the final selection. Taxpayers should read the instruction for the exact threshold figures.
Tighter Oversight Inside the Department
The Department also wants stronger supervision. Earlier directions required Deputy Commissioners to supervise and present cases before the Audit Monitoring Committee. Instead, State Tax Officers or Assistant Commissioners often presented them. Accordingly, the new instructions stress accountability at the right level.
In addition, field approvals have limits. The Zonal Additional Commissioner may approve audit visits for up to 30 per cent of the cases selected in the zone. Hence, most audits may stay at the desk-review stage.
Notices Must Stay Relevant
The instructions also address audit notices in FORM GST ADT-01. The documents requested in these notices must be relevant. Therefore, taxpayers can reasonably question requests that seem unrelated to the identified issue.
Who Issued the Instructions
Additional Commissioner of State Tax Appasaheb Gorde signed the order with the Commissioner’s approval. The instructions build on earlier internal circulars from 2023 and 2024. These include Internal Circulars 09A of 2023, 04A of 2024, and 10A of 2024.
What Taxpayers Should Do Now
Businesses can prepare in several practical ways:
- Reconcile GSTR-1, GSTR-3B, and GSTR-2B for FY 2023-24.
- Review input tax credit claims and supporting invoices.
- Check e-way bill and e-invoice data for mismatches.
- Keep clear workings for any large or unusual entries.
- Respond to ADT-01 notices promptly and with relevant documents.
Furthermore, a short internal audit now can prevent costly disputes later.
Final Takeaway
Maharashtra GST audit selection now rewards evidence over assumptions. Officers must quantify risk, review cases closely, and justify each selection. Consequently, compliant taxpayers may face fewer audits, while high-risk cases may face sharper scrutiny.
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