CBDT defers Clause 30C and Clause 44 of the Tax Audit Report in Form 3CD on GAAR and GST to March 2021

CBDT issued an ​Order under section 119 of the Income-tax Act, 1961 vide a Circular No. 10/2020 dated 24.04.2020 regarding reporting requirement under clause 30C and clause 44 of the Form 3CD.

The changes in Tax Audit Report (TAR) for Clause 30C pertaining to General Anti-Avoidance Rules (GAAR) and Clause 44 pertaining to Goods and Services Tax (GST) compliance) of Form 3CD is deferred for the third time till March 2021. This time the deferment is due to COVID-19 pandemic.

CBDT takes further steps to ease compliance for taxpayers due to COVID-19 pandemic.


Vide order under section 119 of the Income Tax Act, 1961 in Circular No. 10/2020 dated 24-04-2020, the reporting under clauses 30C & 44 of Tax Audit Report shall be kept in abeyance till 31st March, 2021.

Update:

CBDT Defers Clause 30C and Clause 44 in Tax Audit Report Form 3CD till March 2022

Update:

No further extension to keep these clauses in abeyance is provided by the CBDT after March 2022. Hence, Clause 30C and Clause 44 shall apply thereafter and any tax audit report filed on or after 1st April, 2022 shall have these clauses filled. In other words, these two clauses have become applicable for the tax audit reports in Form 3CD for the FY 2021-22.

Tax Audit Report in Form 3CD was revised/changed in July 2018 by Notification No. 33/2018 dated 20.07.2018 inter alia to incorporate the following two clauses - Clause 30C on reporting of GAAR transactions and Clause 44 on reporting of GST transactions.

30C. (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, please specify:—

(i) Nature of impermissible avoidance arrangement: 

(ii) Amount (in Rs.) of tax benefit in the previous year arising, in aggregate, to all the parties to the arrangement:

44. Break-up of total expenditure of entities registered or not registered under the GST:

Sl No	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 composition scheme	Relating to other registered entities	Total payment to registered entities
(1)	(2)	(3)	(4)	(5)	(6)	(7)

The changes were made effective from August 20, 2018 whereas the due date to file the TAR was September 30, 2018. Since the reporting was exhaustive and the time available for the auditors to complete the task was considered insufficient, the operation of the two clauses was deferred till March 2019 [CBDT Circular No. 06/2018 dated 17.08.2018].

In May 2019, the CBDT had again deferred its implementation till March 31, 2020 to make these clauses applicable from April 1, 2020 [CBDT Circular No. 09/2019 dated 14.05.2019].

Now this time CBDT again extended the applicability date of these two clauses by an Order u/s 119 dated 24.04.2020 issued vide Circular No. 10/2020 dated 24.04.2020 till March 2021.

Under the Income Tax Act, 1961, every person carrying on business is required to get his accounts audited, if his total sales, turnover or gross receipts, in business exceed or exceeds Rs. 1 crore in any previous year. The Tax Audit turnover threshold limit has been increased to Rs. 5 crores for business under section 44AB where at least 95 per cent turnover is made on digital transactions. 

In the case of a person carrying on the profession, he is required to get his accounts audited, if his gross receipt in profession exceeds, Rs. 50 lakh in any previous year.

Finance Act, 2020 has made further changes in tax audit report filing due date to specify one month prior to the due date for furnishing the return of income under section 139(1).

With this order dated 27.04.2020, the reporting requirements under clause 30C and clause 44 of the Tax Audit Report is kept in abeyance till March 2021. This means for Tax Audit Reports to be furnished till March 2021, the tax auditors will not be required to furnish details called for under the said clause 30C and clause 44 of the Tax Audit Report. 

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Read the full text of Circular no. 10/2020 dated 24.04.2020

Circular No. 10/2020

F. No. 370142/9/2018-TPL

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

TPL Division 

New Delhi, dated 24th April, 2020 

Order under Section 119 of the Income-Tax Act, 1961

Section 44 AB of the Income-Tax Act, 1961 (‘the Act’) read with Rule 6G of the Income-tax Rules, 1962 (‘the Rules’) requires specified persons to furnish the Tax Audit Report along with the prescribed particulars in Form No. 3CD. The existing Form No. 3CD was amended vide notification no. GSR 666(E) dated 20th July, 2018 with effect from 20th August, 2018. However, the reporting under clause 30C and clause 44 of the Tax Audit Report was kept in abeyance till 31st March, 2019 vide Circular No. 6/2018 dated 17.08.2018, which was subsequently extended to 31.03.2020 vide Circular No. 9/2019. 

Several representations were received by the Board with regards to difficulty in implementation of reporting requirements under clause 30C and clause 44 of the Form No. 3CD of the Income-tax Rules, 1962 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 view of the prevailing situation due to COVID-19 pandemic across the country, it has been decided by the Board that the reporting under clause 30C and clause 44 of the Tax Audit Report shall be kept in abeyance till 31 st March, 2021.

(Ankit Jain)

Dy. Commissioner of Income Tax (OSD)

TPL Division

Download Copy of Circular No. 10/2020 dated 24.04.2020 in pdf format.

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