The Income Tax Department on Monday postponed the need for companies to include details of Goods and Services Tax (GST) and GAAR in their Income Tax Audit Report for the third time in a row. Companies are no longer required to submit the details of GST and GAAR in their Income Tax Audit Report till 31 March 2021. The Central Board of Direct Taxes (CBDT) in its order issued on Monday said that the board has received several memoranda regarding the problems in this regard. “In view of the situation arising out of the current corona virus epidemic, the Board has decided to exempt the tax audit report from the inclusion of the details of GST and General Anti-Avoidance Rules (GAAR) by 31 March 2021”.
In the case of business units having a turnover of more than Rs 1 crore, companies paying tax under the estimated taxation regime, professionals with gross receipts of Rs 2 crore and more than Rs 50 lakh have to comply with the tax audit requirements. September 30 is the fixed date for this return and if the taxpayer falls under the valuation transfer provision then there is a time till November 30 for that. The CBDT has stated that it has received memorandums regarding difficulty in meeting the requirements under Article 30C attached to GAAR in Form No. 3 CD and Article 44 in case of GST compliance. The concerned parties say that the deadline for implementing these provisions should be extended in view of Covid-19.
The board said, “After examining the case keeping in view the situation arising across the country from the Covid-19 epidemic, it is decided that the requirement of reporting under Article 30C and Article 44 in the tax audit report is to be postponed till March 2021. The Income Tax Department changed the tax audit form-3 CD in July 2018, which sought details of GST as well as GAAR. This step was taken to prevent companies from showing their deals through other countries to avoid tax payments. These changes were to be implemented from August 20, 2018. The date of implementation of it continued from time to time and now it has been extended till 31 March 2021.