GST reporting in Income Tax Audit Report (Form 3CD) - Clause-44

 Since the inception of cross-sharing of information between Direct Tax authorities and Indirect Tax authorities, the taxpayers are at the receiving end. One of the major challenges is the GST reporting in Income Tax Audit Report i.e., Form 3CD.

 

Clause 44 of Form 3CD

 

S. No.	The total amount of expenditure incurred during the year	Expenditure in respect of entities registered under GST				Expenditure relating to entities not registered under GST
		Relating to goods or services exempt from GST	Relating to entities falling under the composition scheme	Relating to other registered entities	Total payment to registered entities
(1)	(2)	(3)	(4)	(5)	(6)	(7)

 

Challenges

 

1.              A taxpayer who is unregistered under GST but liable to Audit under Income Tax should also furnish such details. Examples of such cases include persons who supplies only exempted goods or services under GST or persons who are carrying only such activities which are not considered ‘business activity’ under GST etc.

 

2.              Revenue expenditure as well as capital expenditure is to be reported.

 

3.              Consolidated expenditures by all GST registrations shall be reported. Therefore, details to be obtain from all GST registrations of a single entity.

 

4.              Clause 44 seeks information about ‘expenditure relating to unregistered suppliers’. Following points are important to consider:

 

·                Where a supplier’s registration is cancelled mid-year, it has to be shown under expenses relating to un-registered persons for the period post cancellation

 

·                It may be possible that a taxpayer is paying GST under RCM, but the supplier is a registered person under GST

 

·                Unlike for registered persons, total expenditure is to be reported and not the total payment made to unregistered persons