Amendment in Form 3CA-3CB-3CD for the AY 2022-23
1) Applicability of Clause 44 of Form 3cd for Ay 2022-23
Form 3CD contains ‘Clause 44’ which deals with reporting requirements related to GST expenditure and is a significant cause of concern among the tax auditors and the assessee.
Clause 44 requires reporting of the break-up of the total expenditure incurred. Hence, head-wise reporting of total expenditure is required to be reported in Form 3CD under this clause.
Further, this clause is required to be reported by all the reporting assessees whether the assessee is registered under GST or not. Thus, even if a person is not registered under GST, a break-up of total expenditure in the prescribed table is required to be furnished.
“ Break-up of total expenditure of entities registered or not registered under GST”
- Columns In Clause 44
Column 1 : Serial Number
Column 2 : Total amount of Expenditure incurred during the year
Column 3 to 6 : Expenditure in respect of entities registered under GST;
C3 : Relating to goods or services exempt from GST
C4 : Relating to entities falling under composition scheme
C5 : Relating to other registered entities
C6 : Total payment to registered entities (C3+C4+C5)
Column 7 : Expenditure relating to entities not registered under GST
Depreciation under section 32, deduction for bad debts u/s 36(1)(vii) etc. which are not expenses should not be reported under this clause in any of the Columns from 3 to 7.
Schedule III to the CGST Act, 2017 lists out activities or transactions which are treated neither as a supply of goods nor a supply of services and thus expenditure incurred in respect of such activities need not be reported under this clause in any of the columns from 3 to 7.
(Column 3): Here, the value of all inward supply of goods or services which are exempt from GST is to be given.
Expenditure relating to other registered entities is furnished in Column 5. Value of all inward supplies from registered dealers, other than supplies from composition dealers and exempt supply from registered dealers, are to be mentioned here.
In the table under clause 44, the language used is “expenditure in respect of”. Since, the word used is ‘expenditure’, it is necessary that the capital expenditure should also be reported in the format prescribed. Separate reporting of capital expenditure will provide ease in reconciliation.
An appropriate disclosure should be made by the Tax auditor in Form 3CA/3CB, as the case may be, for the view taken by the assessee in relation to the meaning of “Total expenditure” and the method of filling up the appropriate columns. If the assessee is not in a position to give the details as required in clause 44, an appropriate disclosure/disclaimer may be made by the auditor in Form 3CA/3CB. Where the assessee has provided reason for not being able to provide details, the same may be reported, if found appropriate.
2) Applicability of Clause 30 C in the AY 2022-23
(a) Whether the assessee has entered into an impermissible avoidance arrangement, as referred to in section 96, during the previous year? (Yes/No)
(b) If yes,
(i) Nature of the impermissible avoidance arrangement:
(ii) Amount (in Rs.) of tax benefit in the previous year arising, in aggregate, to all the parties to the arrangement.