Form 3CD of Tax Audit Report was amended in July 2018 by Notification No. 33/2018 dated 20.07.2018 Clause 44 on reporting of GST transactions was added. However its implementation was kept in abeyance till 31st March 2022. However, for tax audit reports filed from 1st April 2022 onwards, reporting under this clause will be mandatory. Hence, you will be required to report the information as required in this clause for tax audit for the FY 2021-22.
Following are the reporting requirements under Clause 44 of audit Form 3CD
1)The total amount of expenditure incurred during the year : Here, the total expenditure incurred during the year shall be considered. It is yet to be clarified whether the expenditure only includes revenue expenditure or it shall include capital expenditure as well. Hence as off now all the expenditure will be covered (Revenue and Capital both)
2)Expenditure in respect of entities registered under GST (This section has been further divided into 4 parts)
A)Relating to goods or services exempt from GST
It includes those expenses that have been exempted from GST. As per Section 2(47) of the CGST Act, exempt supply includes the following supplies of goods or services or both:
- That attracts NIL rate of tax or
- That is wholly exempted from tax under section 11 of the CGST Act or
- That is wholly exempted from tax under section 6 of IGST Act or
- Non-taxable supply
However, exempt supplies do not include zero-rated supplies.
B)Relating to entities falling under the composition scheme :It includes the amount of expenditure incurred from the composition dealers.
C)Relating to other registered entities :It includes those expenditures that are neither exempted from GST nor incurred from the composition dealer. In other words, it includes the normal taxable supplies received from the registered persons.
D)Total payment to registered entities :This is the sum total of all the expenditures you incurred in the above points 2(a), (b) and (c).
3.Expenditure in respect of entities not registered under GST :This includes the expenditure incurred from the persons that are not registered under GST.
Disclaimer: This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
Published on: September 7, 2022