The statutory due that crossed six months overdue, then got paid two days after the balance sheet date

This is a composite, illustrative scenario, not an account of a named client. A GST liability of roughly ₹6 lakh had remained unpaid and crossed the six-month-overdue mark four days before the financial year end — a threshold directly relevant to CARO clause 3(vii), which requires reporting statutory dues outstanding for more than six months from the date they became payable. The liability was paid two days after the balance sheet date, and management's initial position was that since it had since been cleared, it did not need to be reported as outstanding — a position that confuses when the balance sheet date position is assessed with what happened afterward.

Why the subsequent payment did not change the reporting position

CARO clause 3(vii)(b) asks what statutory dues were outstanding for more than six months as at the balance sheet date, not as at the date the audit report is signed. A liability that had already crossed the six-month line by the balance sheet date is reportable on that basis regardless of what happened in the days or weeks after year end — paying it off before the report is signed does not retroactively change its age as at the balance sheet date, any more than paying off an overdue loan the week after year end would change whether it was overdue at year end.

What the ageing test actually calculated

1. 01Computed the exact due date and the exact number of days overdue as at the balance sheet date, not the payment dateThe liability's original due date made it 184 days overdue as at the balance sheet date — four days past the six-month line, by this computation.
2. 02Checked whether 'six months' was being computed on a calendar-month or day-count basis, since the gap was this close to the lineUsing a straightforward calendar computation, the due date clearly fell more than six months before the balance sheet date, leaving no reasonable room to classify it as just under the threshold.
3. 03Confirmed the actual payment date from the bank statementPaid two days after the balance sheet date — consistent with management's account, and irrelevant to the clause 3(vii) assessment itself, but still worth confirming the full facts for the file.
4. 04Discussed the reporting position directly with managementOnce the distinction between balance sheet date position and subsequent settlement was explained, management agreed the amount needed to be reported under clause 3(vii).

What went into the file

• The precise day-count computation showing the liability had crossed six months overdue before the balance sheet date, with the calculation shown rather than just the conclusion.
• The bank statement confirming the actual settlement date, documented separately from the reporting conclusion.
• The discussion with management and the final agreed CARO disclosure.
• A note on why a liability this close to the six-month line deserves an explicit day-count calculation rather than a rounded estimate, given how easily a few days either way changes the reporting outcome.