Reporting Of GST, GAAR Details In Tax Audit Report Deferred Till March 2019

Revenue department defers implementation of a reporting norm for tax auditors where details of GST and GAAR were required. 

(Source: BloombergQuint)
(Source: BloombergQuint)

The revenue department today deferred implementation of a reporting norm for tax auditors wherein they were required to furnish details of the goods and services tax and general anti-tax avoidance rules till March 31, 2019.

The Income Tax Act requires prescribed persons to furnish the tax audit report along with the prescribed particulars in form 3CD. The Central Board of Direct Taxes had amended the form 3CD, effective Aug. 20 this year. The amended form includes disclosures on secondary adjustments, interest deduction limitation, general anti-tax avoidance rules, specified financial transactions, expense break-up related to entities with regards to the GST, among others.

The CBDT had received several representations from auditors that the implementation of reporting requirements under the proposed clause 30C pertaining to the GAAR and proposed clause 44 on the GST in the form No 3CD may be deferred.

“The matter has been examined and it has been decided by the board that reporting under the proposed clause 30C and proposed clause 44 of the tax audit report shall be kept in abeyance till March 3, 2019,” the CBDT said in a notification.

Therefore, for tax audit reports to be furnished on or after Aug. 20, 2018 but before April 1, 2019, “the tax auditors will not be required to furnish details called for under the said clause 30C and clause 44 of the tax audit report”, it said.

On the circular, Anupam Jain, executive director, Nangia Advisors LLP, said ever since the revised audit format was circulated, there was much restlessness among industry and auditors alike on the expansive import of the clause introduced on the GAAR.

The CBDT’s receptive and quick action step in this regard is a clear indicator that the representations are not only being given adequate importance but also are being acted upon well in time to avoid unnecessary vague tax environment.
Anupam Jain, Executive Director, Nangia Advisors LLP,

Naveen Wadhwa, deputy general manager of, said it would not be easy for the companies to provide the break-up of expenses in desired format and for the auditors to verify it.

“However, this relief is applicable to only those taxpayers who are liable to tax audit under Section 44AB (provisions pertaining to the tax audit). In the income tax return form 6, it is mandatory for a company to give a break-up of the GST expenses if it is not liable for tax audit. No relief is granted to such companies and they are still liable to report the GST expenditure break-up at time of filing of ITR,” he said.

Tax expert Sanjay Sanghvi (partner, Khaitan & Co) termed the CBDT’s move as a “very fair decision”.