Clause 27(a) of Tax Audit Form 3CD - GST Input Tax Credit Disclosure - Issue and Resolution

The wordings in clause 27(a) of the Tax Audit Form 3CD, relating to reporting of GST Input Tax Credit, has created a lot of confusion in the CA fraternity, different practitioners and corporates having different interpretations leading to doubt and sometimes a difference of opinion with clients.

What's the confusion all about?

Clause 27(a) of the latest Tax Audit Form 3CD officially notified by CBDT reads as follows:

"27(a) Amount of Central Value Added Tax credits availed of or utilised during the previous year and its treatment in the profit and loss account and treatment of outstanding Central Value Added Tax credits in the accounts." (refer screenshot below)

Whereas Clause 27(a) of the utility for Tax Audit Form 3CD officially uploaded by CBDT in 2025 and earlier years reads as follows:

"27(a) Amount of Central Value Added Tax Credits/ Input Tax Credit(ITC) availed of or utilised during the previous year and its treatment in profit and loss account and treatment of outstanding Central Value Added Tax Credits/Input Tax Credit(ITC) in accounts." (refer screenshot below)

From the above two excerpts of the clauses, it is evident that the wordings used by CBDT in the utility version of the Tax Audit Form 3CD clearly differs from the official notified version of the form, as the words "Input Tax Credit (ITC)" are not mentioned in the officially notified form.

In fact, para 47.9 of ICAI's revised version of the guidance note on Tax Audit for 2025 now also mentions about the difference between the notified clause and the utility version of the clause, but does not explicitly clarify the reason for difference and whether the utility version of the clause is to be completely ignored. However, after a complete reading of para 47 of ICAI's guidance note, it appears that ICAI has in essence indicated that reporting is to be done in accordance with the officially notified form and not in accordance with the utility i.e. only w.r.t CENVAT credit and not w.r.t GST Input Tax Credit.

Evolution of the utility version of Tax Audit 3CD Form

The Goods & Service Tax Act (GST) came into force in India on 1st July 2017. Before this, each state had its own VAT law alongside the central indirect tax laws relating to service tax, excise duty and the overarching CENVAT. Clause 27(a) of the utility version of the Tax Audit 3CD Form in FY2016-17 (i.e. the last year of the erstwhile CENVAT law) read as follows:

"27(a) Amount of Central Value Added Tax Credits availed of or utilised during the previous year and its treatment in profit and loss account and treatment of outstanding Central Value Added Tax Credits in accounts." (refer screenshot below)

The above clause clearly did not include the words "Input Tax Credit(ITC)". After GST became applicable in 2017, clause 27(a) of the first Tax Audit Form 3CD for FY2017-18 was updated and here's what it read:

"27(a) Amount of Central Value Added Tax Credits/Input Tax Credit(ITC) availed of or utilised during the previous year and its treatment in profit and loss account and treatment of outstanding Central Value Added Tax Credits/Input Tax Credit(ITC) in accounts." (refer screenshot below)

The words "Input Tax Credit(ITC) has been specifically added to this clause. Now it is abundantly clear that the intention of CBDT has always been to capture the GST input tax credits as well in clause 27(a), as the word "Input Tax Credit(ITC)" was only introduced for the first time in FY2017-18, which was the same year in which GST became applicable. However, it appears that CBDT has missed to update the officially notified Form 3CD under the Income Tax Law, creating the confusion and divide among practicing professionals.

Resolution and Way Forward

• What is actually required to be reported in clause 27(a)?

  Follow the officially notified form as per the law - only disclose CENVAT credit, leave blank if CENVAT is not applicable on the entity. This should ideally not attract any query/penalty as there is no contravention of the law.

• Can the auditor still choose to disclose the GST input tax credit in this clause?

  Yes, since the utility version of the form also asks for details of GST input tax credit. However, the disclosure shall be mutually agreed with the client. If the client prefers not to disclose the GST input tax credit details as it is not required by the officially notified form, the auditor must follow the client's preference. Necessary management representation may be sought by the auditor for this purpose.

  If GST input tax credit details are reported in this clause, the auditor will have to carry out the necessary audit procedures for the figures being reported.

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