ICAI introduces New Balance Sheet Format for Non-Corporate Entities, Increased Audit Reporting and Compliance Forecasted [Read Order]
The changes are slated to be put into effect from 1 April, 2025
ICAI – New Balance Sheet Format – Non-Corporate Entities – Increased Audit Reporting – Compliance Forecasted – taxscan
ICAI – New Balance Sheet Format – Non-Corporate Entities – Increased Audit Reporting – Compliance Forecasted – taxscan
The Institute of Chartered Accountants of India ( ICAI ) has advised Chartered Accountants (CA) of increased requirements in audit and compliance reporting as a new format for maintaining balance sheets for non-corporate entities is set to come into effect from 1 April, 2025.
The proposed changes were communicated in a seminar hosted at the Bilaspur branch of the ICAI in the state of Himachal Pradesh. The seminar, attended by numerous CAs, aimed to apprise professionals of the changes in the modus of financial reporting in light of recent amendments to the Goods and Services Tax (GST) regime.
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CA Navneet Sharma who convened the meeting explained the nitty-grittys of the new balance sheet format including its cohesion with the Schedule-III of the Companies Act, 2013 regarding financial reporting formats for entities required to comply with the Companies (Accounting Standards) Rules, 2006.
The changes to the reporting format are anticipated to increase transparency and stringency in financial reporting, but shall in turn increase the workload on CAs and other financial professionals, inadvertently leading to higher audit fees being charged on those availing their services.
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Chairman of the ICAI Himachal Pradesh Branch, Naresh Vashist advised professionals to inform clients that the revised format shall have an overbearing effect on business entities of all scales, thus leading to grass-root level changes in audits and financial reporting, thus calling for increased audit fees.
Another key area of discussion was the GST Amnesty Scheme, introduced with the intent of reducing the burden of penalties on pending GST appeals to enable disputed taxpayers to receive benefits of waivers or reductions in penalties if they pay the requisite penalties within the time-window introduced through the GST Amnesty Scheme.
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The initiative, designed to minimize litigation and enhance tax compliance, provides waivers on interest and penalties for non-fraudulent tax demands from FY 2017-18 to 2019-20. However, to benefit from this relief, taxpayers must clear their outstanding dues by March 31, 2025.
CA Hanish Sharma heading this part of the session further underscored a crucial update regarding Input Tax Credit ( ITC ) on rental properties.
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Initially, a Supreme Court ruling permitted ITC claims for buildings used for rental purposes. However, a subsequent retrospective amendment to the GST law made applicable from 2017 revoked this benefit. Attendant CAs were urged to inform their clients of this significant change to prevent potential disputes and statutory action.
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Newly elected managing committee member, CA Chetan Sankhyan, expressed gratitude to the attendees and speakers, emphasizing the seminar’s importance amid evolving financial regulations.
The seminar concluded with a call for increased vigilance among CAs as they adapt to navigate a more intricate compliance landscape, influencing both their professional duties and client advisory roles.
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