SECTION 30/42 ANNUAL RETURN/RECORD KEEPING

GST Update 31.08.2016

GST DAILY DOSE OF UPDATION:-

SECTION 30/42 ANNUAL RETURN/RECORD KEEPING:- Every registered taxable person, other than input service distributor, a deductor under section 37, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and in such manner as may be prescribed on or before the 31^st day of December following the end of such financial year.

It is further provided that every taxable person who is required to get his accounts audited under sub-section(4) of section 42 shall furnish, electronically, the annual return along with theaudited copy of the annual accounts and a reconciliation statement, reconciling the valueof supplies declared in the return furnished for the year with the audited annual financialstatement, and such other particulars as may be prescribed.

If section 42(4) is pursued, it is found that every registered taxable 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 to the proper officer a copy of the audited statement of accounts, the reconciliation statement and such other documents in the form and manner as may be prescribed in this behalf.

On harmoniously reading the above cited provisions, it is found that the Model GST Law negatives the avowed policy of simplification of tax policy in the GST regime. It is observed that apart from filing annual return, which will contain all the particulars of the financial statements of the assessee, the assessee will also be required to furnish audited statement of accounts, if its turnover exceeds the prescribed limit. Moreover, reconciliation statement reconciling the values of supplies declared in the return furnished with the supplies reflected in annual financial statement should also be submitted which is very difficult compliance. It is submitted that there may be possibility that the consolidated financial statements are being prepared but since GST regime requires separate registration for each State, assessee may face practical difficulty in reconciling the figures. Not only this, financial statement contains figures that may be attributable to supplies that are not covered within the ambit of GST but assessee will be required to justify the figures shown in the financial statements with that reflected in the returns filed.

It is also pertinent to mention that as of now, there is no requirement to submit audited financial statements in the Central Excise Laws for assessees whose accounts are required to be audited. Moreover, there is no provision for audit of accounts itself for the purpose of Central Excise Laws. However, with the advent of GST regime, assessee whose accounts are liable to be audited will be required to furnish audited financial statement of accounts along with such documents as may be prescribed. This will definitely increase compliance and encourage unnecessary paper formalities which will add to administrative and compliance cost of assessees.

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GST Update 31.08.2016

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