Tax Auditor to disclose break up of sundry creditors
More duty cast on Tax Auditor to disclose break up of sundry creditors..which has significant implications under GST
What is the change in reporting by Tax Auditor?
Sundry creditors now onward will be disclosed under two heads in Tax Audit report viz Current and Non current liabilities.
Sundry creditors are generally those parties from whom business purchase goods or services in credit and claim ITC of input taxes on such supplies .
Under GST law if payment is not made beyond 180 days from date of invoice then such ITC claim is required to be reversed and gst tax needs to be paid along with interest.
Hence when above break up is given of Sundry creditors it is advisable to reversed the ITC for crs under non current liabilities category
What will be the consequences of non compliance?
Since this information is now available readily to tax department through tax audit report, a notice will be issued to the tax payer to pay tax along with applicable interest and penalty .
Both CA tax auditor and company accounts department must put in place appropriate process in place to avoid unnecessary problem