If I want to express that I am now 40 pcs short of the Item, can I say there are still 40pcs short,or there are 40 pcs shortage.
Firstlym it sounds confusing to say that we are 40 pieces short of "an item", because "an item" is usually one single thing, so it is not clear how "an item" can be missing 40 pieces. You might mean something like "40 pieces short of" a complete set, or a full load, or something else, but it is hard to know exactly what to say without knowing what exactly you are referring to.
You already said the most idiomatic and fluent way: we are 40 pieces short. We normally say that "we are short (a thing)", or "we are (a thing) short", meaning that we are missing it, not that the thing itself is short.
there are 40 pieces shortage doesn't quite make sense. Shortage is a singular, countable noun, so you can't say "There are shortage". But you could say "There is a shortage of 40 pieces" or "There are 40 pieces missing".