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February 1, 2021

5 Reasons for Removal of GST Audit in Budget 2021

by facelesscompliance in Budget, GST

5 Reasons for Removal of GST Audit in Budget 2021

One major change in GST in the Finance Bill 2021 is No GST Audit is required. Clause 101 of Finance bill states Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional.

Further, in Clause 102 of Finance bill Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It also provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.

Read 15 Changes in GST in Budget 2021 Click here

Reason for Removal of GST Audit as per Extract of GST Council Minutes pg no. 133.

Agenda Item 5A(vi): Filing of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement)


1) A lot of negative feedback was received regarding filing of annual return and
reconciliation statement for FY 2017-18. Most of the feedback is on working of the IT portal.

2) Due date for filing Annual Return and Reconciliation statement for 2017-18 was extended 7 times.

3) t has also been reported that the cost of compliance for filing of Annual Return and Reconciliation has been high especially for smaller taxpayers since this process requires engagement of a tax professional (Chartered Accountant or Cost Accountant) who reportedly insist that they should be engaged for the entire compliance management process throughout the year thus pushing the cost of compliance.

4) Itis seen that additional tax of about Rs. 3176 Crores (Rs. 2079 Cr. In cash) additional tax and Rs. 575.76 Cr. interest thereon got collected from Annual Return GSTR-9.

5) Additional revenue from GSTR-9C based 011 the Auditor’s recommendations has been relatively low at Rs. 392 Cr. (Rs. 261 Cr. in cash) and Rs. 81.16 as interest.

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