GST and GAAR Reporting in Income Tax audit report deferred till Mar 2021

In view of the coronavirus outbreak and the consequent lockdown, the Income Tax Department has deferred for the third times GST and GAAR Reporting in Income Tax audit report till Mar 2021.

In July 2018, the Income tax department had changed the tax audit Form-3CD, seeking details under the GST as well as the GAAR, which seeks to prevent companies from routing transactions through other countries to avoid taxes. The GST and GAAR related details were first supposed to be reported from August 20, 2018. However, it kept getting deferred and was supposed to be reported from April 1, 2020. However reporting requirement of these details in income tax audit form has been kept in abeyance till March 31, 2021, meaning that all income tax audit reports need not include reporting requirement under clause 30C and clause 44 of the Form 3CD details on the GST and the General Anti-Avoidance Rules (GAAR) till March 2021.

In a circular dated 24-April, 2020 issued by the Central Board of Direct Taxes (CBDT) said, “Several representations were received by the board with regards to difficulty in implementation of reporting requirements. In view of the global pandemic due to COVID-19 virus and requested for deferring the applicability of the above provisions.

Business entities having a turnover of more than Rs 1 crore (or Rs 2 crore if they have opted for presumptive taxation) and professionals with gross receipts of more than Rs 50 lakh have to comply with the tax audit requirements under Section 44AB of Income Tax Act. The due date for its filing is September 30 and if the taxpayer is covered by transfer pricing provisions, the due date is November 30.

This certification poses a challenge to auditors as it is very subjective in nature. Though this deferment comes as a relief to the auditors, it is better to do away with this requirement as it is not fair to expect the auditors to comment on such subjective piece of legislation.

LegalFilings believe that even without coronavirus, the tax department would have deferred the reporting of GAAR details in the absence of comprehensive guidelines.


Click here for Circular

Also Read:

Extension of Various Tax Due dates-A Major Relief amid COVID-19

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