Budget 2021 was presented by our Hon’ble Finance Minister Smt. Nirmala Sitharamanji on 01.02.2021 and we can say that it was the shortest Budget as far as tax reforms are concerned.
Although there were no major amendments in GST as all changes in GST are done by GST council and then the same is implemented via notification.
However the one important update in GST which stood out was that provision for GST audit to be done by a Chartered Accountant or cost accountant has been scrapped.
Amendment to section 35 in Finance Bill read as under:
“In section 35 of the Central Goods and Services Tax Act, sub-section (5) shall be omitted“
Section 35(5) read as under:
“Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under section 44(2) of CGST Act and such other documents in such form and manner as may be prescribed.”
Although Budget 2021 has suggested to scrap section 35(5) of CGST act, which in turn shall scrap GST audit. However still clarification regarding the period from which same shall be applicable is awaited.
Many people have started asking CBIC as to whether same shall be applicable to FY 2019-20 as due date for same is near.
CBIC in it’s reply has mentioned as under:
“Please note Section 35 and 44 of CGST Act are proposed to be amended in Finance Bill 2021. However, these proposals will come into effect from a date to be notified later. For FY 2019-20, the existing provisions shall continue.”
To read the tweet CLICK HERE.
Thus, from the above tweet it can be said that for FY 2019-20 GST audit is still applicable.
Further, one more point to keep in mind is that amendment has been proposed not only to section 35 but also to section 44 which read as under:
“Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section
52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:”
Although GST audit has been scrapped but now the reconciliation statement which was the audit statement in the previous provision is still active and has been merged with Annual return.
As per the language it can be said that with the use of word “may” it seems that this reconciliation statement is optional and self-certified by assessee but at the same it will be complex and will need assistance of Chartered Accountant or any Tax professional.
Hence, it can be concluded that even though GST audit has been audited but still the GST filing and GST annual return is not so simple that the tax payer can file them by themselves and there is lot more a professional has to still offer.
If you need any assistance of a professional feel free to book consultation with a tax expert at: CLICK HERE.