Clause 4 of Form 3CD is your cue to disclose whether the assessee is liable to pay any indirect taxes. This includes GST, and historically, excise duty, service tax, VAT, and even customs duty.
But this clause often gets ignored, misunderstood, or under-reported — especially in transitional cases or for assessees with multiple registrations. 🔍
🧾 What Does Clause 4 Require?
Clause 4 asks:
“Whether the assessee is liable to pay indirect tax like excise duty, service tax, sales tax, goods and services tax, customs duty, etc. If yes, furnish the registration number, GST number or any other identification number allotted.”
So, your job is to:
✅ Confirm whether the assessee was liable for any indirect taxes during the relevant financial year
✅ If yes, provide the registration numbers for each applicable law (GSTIN, Importer-Exporter Code, etc.)
🔄 Indirect Tax Categories (Applicable Based on Timeline)
| Tax Type | Applicability |
|---|---|
| GST | From 1 July 2017 onwards |
| Service Tax / Excise / VAT | Applicable before GST era |
| Customs Duty | Still applicable (for imports/exports) |
| Professional Tax / Labour Cess | Depends on state laws and business nature |
🧪 Real-World Scenarios and Applied Cases
✅ Case 1: Regular GST-Registered Business
ABC Traders, a wholesale supplier, is registered under GST.
➡️ Report:
“Yes. The assessee is liable to pay indirect taxes. GSTIN: 29AAACA1234Z1Z5”
📝 Tip: Mention all active GSTINs, especially if there are multiple states or branches.
🔁 Case 2: GST Registration Taken Mid-Year
Ramesh Enterprises crossed the GST threshold on 1st December 2024 and registered thereafter.
➡️ Report:
“Yes. GST registration obtained on 10-Dec-2024. GSTIN: 27AABCR1234H1Z9”
📝 Mention date of liability and registration
⚠️ Common issue: Business liable from a date but delayed registration – disclose this with an observation note.
❌ Case 3: Not Liable for Any Indirect Tax
A small professional freelancer earning ₹10 lakh annually, below GST threshold.
➡️ Report:
“No. The assessee is not liable to pay indirect taxes during the financial year.”
📝 But if voluntarily registered, still furnish GSTIN even if liability is nil.
🏢 Case 4: Multi-State GST with Branches
XYZ Ltd. has branches in Maharashtra, Karnataka, and Gujarat.
➡️ Report all three GSTINs:
-
Maharashtra – 27AAACX1234A1ZL
-
Karnataka – 29AAACX1234A1ZP
-
Gujarat – 24AAACX1234A1ZN
📝 Mention the states and business units they correspond to.
🚨 Case 5: Old Service Tax/Excise Numbers Still Active in PAN Database
Some older entities still reflect Excise/Service Tax numbers in government records.
✅ Report these ONLY if they were relevant during the year under audit
❌ If the tax is obsolete and not used, no need to list them — but audit working papers should show confirmation of non-applicability.
⚠️ Common Problems and Fixes
❗ Problem 1: GSTIN Not Furnished or Incorrect
✅ Fix: Always verify via GST portal. PAN-based search helps confirm active GSTINs.
❗ Problem 2: Multiple Branches, But Only One GSTIN Reported
✅ Fix: Cross-check accounting records — many entities miss reporting additional state GSTINs.
❗ Problem 3: Customs/IEC Overlooked
✅ Fix: If the entity imports/exports, Importer-Exporter Code (IEC) issued by DGFT must be disclosed.
✅ Summary Table
| Situation | What to Report | Notes |
|---|---|---|
| Regular GST taxpayer | GSTIN(s) | Mention all, state-wise |
| GST taken mid-year | GSTIN + date of registration | Add liability date |
| Not liable under any tax | “No” | Only if genuinely exempt/unregistered |
| Branch audit | GSTIN of branch + HO reference | Match Clause 3 naming |
| Imports/Exports | IEC Code | Mandatory if trading internationally |
📌 Final Tips
✔️ Always verify GSTINs on www.gst.gov.in
✔️ Include multiple registrations if applicable
✔️ Mention date of liability and date of registration if different
✔️ Disclose if any mismatch, delay, or non-compliance exists — even if resolved later
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