What includes clause 44?

Clause 44 requires a taxpayer to provide a break-up of expenditures made to GST registered entities/Non-GST registered entities i.e Outgoing Expenses. Hence, disclosure in Clause 44 will be applicable to all the assessees who are subjected to tax audit u/s 44AB irrespective of the fact whether they are registered under GST or not.

ICAI Guidance Note

ICAI has recently issued new guidance notes effective from AY 2022-23 onwards. In that guidance notes, an explanation has been provided regarding reporting under clause 44 and related points. But there are still a few points regarding which we do not have any direct clarification.

Following are the important point in Guidance Note:

1. The whole Expenditures including capital Expenditures i.e. purchases of Fixed Assets are to be given in consolidated form. No separate figures are required to be reported.
2. Depreciation need not to be reported.
3. Transactions which are covered under schedule III are not required to be reported under clause 44.
4. Non-GST expenditures  are to be bifurcated under “Exempted supply”.

Previous deferment of Clause 44

Clause 44 has been deferred in following year with notification No.

1. FY 2017-18 vide circular 6/2018 dated 17th August 2018
2. FY 2018-19 vide circular 9/2019 dated 14th May 2019
3. FY 2019-20 vide circular 10/2020 dated 24th April 2020 & circular 05/2021 dated 25th March 2021

Format in which data can be collected for clause 44