The department of Income tax has delayed the proposal to implement reporting of GST and GAAR or general anti-avoidance rules for all tax audits that are to be furnished between August 20 and April 1, 2019. A circular issued by the department on Friday said "the proposed measure has been kept in abeyance till 31 March".
In a notification issued last month, the department introduced the provision of additional reporting in tax audits effective August 20.
Form 3CD or tax audit is required to be done in lieu of all auditable companies whose turnover for a financial year exceeds Rs. 1 crore. But seeking the taxing nature of additional reporting requirements, stakeholders made a representation to the CBDT and sought relaxation on this ground.
GAAR is an anti-avoidance measure that lends power to the tax department to oversee arrangements specifically arrived at for evading taxes.
"However, the requirements are only postponed and not done away with. Any tax audit report signed after 31st of March 2019 will carry this reporting requirement, but in all fairness, it does allow the auditors to be better prepared", Rahul Jain, Partner, Nangia Advisors LLP was quoted as saying in one of the leading financial dailies.