Reporting of GAAR, GST details in tax audit report deferred till March 2021

In view of the coronavirus outbreak and the consequent lockdown, the Income Tax Department has deferred the reporting of Goods and Services Tax (GST) and GAAR (General Anti-Avoidance Rules) details in the tax audit report till March 31, 2021.

In a circular issued on Monday, 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."

"The matter has been examined and in wake of the prevailing situation due to coronavirus pandemic across the country, it has been decided by the Board that the reporting requirement under clause 30C and clause 44 of the Tax Audit Report will be kept in abeyance till 31 March,  2021," it said.

This is the third time the reporting of GST and General Anti-avoidance Rule (GAAR) details have been deferred. The GST and GAAR related details were first supposed to be reported on August 20, 2018. However, it kept getting deferred and was supposed to be reported from April 1, 2020. Now, due to the coronavirus outbreak, taxpayers who are supposed to file audit reports get a breather of another year.

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

Amit Maheshwari, Tax Partner, AKM Global, a consulting firm, says: "We don't have detailed guidance on certain aspects related to reporting on GAAR. 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 a subjective piece of legislation. "

Businesses having gross 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 are supposed to file tax audit report.

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