Through E-mail/Speed Post

Dated: 04.09.2021

The Chairman,
Central Board of Indirect Taxes & Customs (CBIC)
Government of India, Ministry of Finance,
Department of Revenue,
North Block, New Delhi-110001
[email protected]

Reg: Need a clarification Reg-applicability of GST Audit for the year 2020-21.

Respected Sir,

We would like bring your kind attention that Section 35(5) of the CGST Act, 2017 has been omitted and Section 44 of CGST Act, 2017 has been substituted by Finance Act, 2021 so as to remove the mandatory requirement of furnishing a Reconciliation Statement (GSTR-9C) duly audited by a Practicing Chartered Accountant or a Cost Accountant. However particular section 110 & 111 of Finance Act, 2021 regarding in this concern were not notified at that time.

Many piles of coins against blue sky and mini blackboard with text GST Audit

On 30 of July, 2021 the GST Council notified about the same through Notification No. 29/2021, as the date of applicability of Section 110 and 111 of the Finance Act, 2021 will be 1 of August, 2021. i.e. form 1 of August, 2021.

The above notification created a huge confusion regarding the interpretation of effective date of amendment as 1 of August, 2021. i.e. whether this amendments are applicable for returns filed after 1 of August, 2021? or this amendments are applicable for returns filed for the period form 1 August, 2021?

Second thought or interpretation of effective date may be taken for the financial year 2020-21 as the GST Council has already decided in their 43rd Council Meeting. In 43 GST Council Meeting, dated May 28, 2021 the Council decided to amend Section 35 and Section 44 of the CGST Act as per Finance Act, 2021 and the changes will be applicable for the Financial Year 2020-2021. It was also decided on that meeting that GSTR 9/9A for Financial Year 2020-2021 will be optional for taxpayers having aggregate Annual Turnover up to Rs.2 Cr. and reconciliation statement in Form GSTR 9C will be made optional for taxpayers having aggregate Annual Turnover up to Rs.5 Cr.

Notification No. 30/2021 –Central Tax, dated 30 July, 2021 which amends Rule 80 of the CGST Rules, 2017 giving effect for the Financial Year 2020-21, omits Part B i.e. Auditor’s Certification Part from Form No GSTR 9C and strikes off the term “auditors recommendation”. Which also implies that Auditor Certification is not required for GSTR 9C filed for the Financial Year2020-21.

In view of the above, it is submitted that Tax payers are not clear as to the applicability of the erstwhile Section 35(5) for the financial year 2020-21 since the effective date is notified as 01.08.2021. Therefore, a clarification from CBIC is much needed.

We, sincerely request you to please issue necessary clarification/circulars/ notifications etc. in this regard.

With highest regards,

Sushil kumar Antal
Advocate (Managing Partner) 
For Lex Stabilis Corporate Advisors

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September 2021