There has been lot of queries and confusions on reporting of Clause 44 under TAR utility.
New reporting in Tax Audit- Clause 44
1. Reporting under clause 44 is mandatory in all cases for Income Tax Audit reporting done for 31st March 2022.
2. Reporting needs to be done for both GST registered and unregistered assesses, Irrespective of whether registered as composition dealer or as a regular dealer.
3. To know whether any of the vendors was a composition dealer or not, you can either recheck the vendor invoice or visit the GST portal and search the vendor through GSTIN to know his registration status.
4. This clause shall also be applicable in case assesses get their accounts audited under presumptive scheme of taxation.
5. This clause shall apply to all kind of expenses whether revenue or capital.
6. Even if certain expenses are exempt from GST still the same has to be reported under column 3 if such transactions have been entered into with a GST registered person.
7. 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.
8. We need to report payment made to a GST registered person irrespective of whether the payment relates to current year expenses or expenses relating to previous FY, including payment made for expenses in advance.
9. There does no exist any column to mention the nature of expenses or the name thereof, like purchases, Commission, electricity expenses or capital expenses. So in my opinion we should consolidate all the expenses and make a single entry in serial number 1.
10. In case books of accounts are not geared up to provide the above information, we can give the following disclaimer:
Details as required by Clause 44 are not maintained by the assessee and hence we are unable to comment.
And/ Or
We have been informed by the assessee that the information required under this clause has not been maintained by it in absence of any disclosure requirement thereof under GST Act. It is not possible to determine break up of total expenditure of entities registered or not registered under the GGT, as necessary information is not maintained by the assessee in his books of accounts. Further the standard accounting software used by the assessee is not configured to generate any report in respect of such historical data in absence of any prevailing statutory requirement regarding the requisite information in this clause. In view of the above, we are unable to verify and report the desired information in this clause.
Written By- CA Jatin Minocha
Call-99115-41774
Comment: