CA Vinod Kaushik
FAQ:
Q.1 Whether Head wise / nature wise information is required in clause 44 or total expenditure is required to be reported?
Ans. Department is asking about total expenditure incurred and not head wise / nature wise information. The structure of form 3CB-3CD/3CA-3CD is designed according to total expenditure point of view.
Q.2 Whether purchase of goods / capital expenses information is required to be reported under clause 44 of above report?
Ans. Yes. Purchase and capital expenditures are required to be reported under clause 44 of such report. Since both the items are covered under terminology of expenditure.
Q.3 How to ensure whether an entity is registered under GST or not?
Ans. The fact of registration under GST Act can be verified from www.gst.gov.in and only entities with active registration can form part of the same. Entities registered at some point of time but if their registration is cancelled on the date of reporting it will be reported under unregistered category. Verification of GSTIN of suppliers is an extended step towards accuracy of information.
Q.4 How and where to check about exempted goods / services?
Ans. Section 2(47) of CGST/SGST Act, 2017 speaks about exempt supply and it states as “exempt supply means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under the CGST/SGST/IGST Act, and includes non-taxable supply;”
Notification No.2/2017 CT (R), which prescribes intra-State supply of goods which are exempt and Notification No.12/2017 CT (R), which prescribes intra-State supply of services which are exempt. Above two notifications need to be referred to understand whether a supply is exempted or not.
Reference of notification no. 01/2017 and 11/2017 does not hold any significance since none of items bears nil rate under above two notification issued.
Nil rated and exempted goods/services are one and same things for the purpose of practical understanding but for academic purposes they are separate items. No items are accommodated in notification no. 01/2017 and Notification No.12/2017 CT (R) which bears nil rate of tax.
Nil rated means the supply which bears nil rate under notification no. 01/2017 and exempted supply means the supply which is exempt under separate notification no. such as Notification No.2/2017 CT (R) and Notification No.12/2017 CT (R).
Q.5 Do we need to report alcoholic liquor for human consumption under clause 44?
Ans. As per definition of exempt supplies it includes nontaxable supplies on which GST is not attracted. Such items are alcoholic liquor for human consumption and five petroleum items. These five items are petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel. Above 6 items comes under the category of non-taxable supplies.
Q.6 What are composition suppliers under GST? How to identify supplies received from such person?
Ans. The composition suppliers are governed by section 10 of the CGST/SGST Act wherein they are given an option to charge GST at lower rate (say 1%) without claim of input tax credit under section 16. The identity of composition suppliers is very simple as they are required to issue bill of supply in place of Tax Invoice.
Extract of Clause 44 of Tax Audit Report for ready reference of Our readers
Breakup of total expenditure incurred during the year
| S. No | Total amount of expenditure incurred during the year | Expenditure incurred in respect of entities registered under GST | Expenditure in relation to non-registered entities | |||
| Relating to exempted goods or services | Relating to entities under composition scheme | Relating to other registered entities | Total payment to registered entities | |||
Author Bio
Can you confirm where to report inward supplies on which the auditee has paid GST under RCM. Eg:- Import of Goods, Legal Fee Paid, Freight Inward etc.,