CHAPTER XIV

Accounts and Records in GST

1) Assessment in GST is mainly focused on self-assessment by the taxpayers
themselves. Every taxpayer is required to self- assess the taxes payable
and furnish a return for specified tax periods i.e. the period for which
return is required to be filed. The compliance verification is done by the
department through scrutiny of returns, audit and/or investigation. Thus,
the compliance verification is to be done through documentary checks rather
than physical controls. This requires certain obligations to be cast on the
taxpayer for keeping and maintaining accounts and records.

2) Section 35 of the CGST Act, 2017 and Chapter VIII of the
CGST Rules, 2017 (hereinafter referred to as rules)
provide that every registered person shall keep and maintain all records at
his principal place of business. It also cast, responsibility on owner or
operator of warehouse or god own or any other place used for storage of
goods and on every transporter, irrespective of whether he is a registered
person or not, to maintain specified records. The section also empowers the
Commissioner to notify a class of taxable persons to maintain additional
accounts or documents for specified purpose or to maintain accounts in
other prescribed manner. It also provides that every registered person
whose turnover during a financial year exceeds the prescribed limit shall
get his accounts audited by a chartered accountant or a cost accountant.

3) Section 35 of the CGST Act, 2017 provides that every registered
person shall keep and maintain, at his principal place of business, as
mentioned in the certificate of registration, a true and correct account
of—

a) production or manufacture of goods;

b) inward and outward supply of goods or services or both;

c) stock of goods;

d) input tax credit availed;

e) output tax payable and paid; and

f) such other particulars as may be prescribed.

In addition, the rules also provide that the registered person
shall keep and maintain records of-

a) goods or services imported or exported; or

b) supplies attracting payment of tax on reverse charge

along with relevant documents, including invoices, bills of
supply, delivery challans, credit notes, debit notes, receipt
vouchers, payment vouchers, refund vouchers and e-way
bills.

4) In case, more than one place of business is specified in
the certificate of registration, the accounts relating to
each place of business shall be kept at such places of
business. A registered person may keep and maintain
such accounts and other particulars in electronic
form in such manner as may be prescribed.

5) Following accounts and records will have to be
maintained by every registered person:

a) accounts of stock in respect of goods received and sup-
plied; and such account shall contain particulars of the
opening balance, receipt, supply, goods lost, stolen, de-
stroyed, written off or disposed of by way of gift or free
samples and balance of stock including raw materials,
finished goods, scrap and wastage thereof;

b) a separate account of advances received, paid and ad-
justments made thereto;

c) an account, containing the details of tax payable, tax
collected and paid, input tax, input tax credit claimed,
together with a register of tax invoice, credit note, debit
note, delivery challan issued or received during any tax
period [not required for person paying tax under section 10];

d) names and complete addresses of suppliers from whom
goods or services , chargeable to tax under the Act, have
been received;

e) names and complete addresses of the persons to whom
supplies have been made;

f) the complete addresses of the premises where the goods
are stored including goods stored during transit along
with the particulars of the stock stored therein;

g) monthly production accounts, showing the quantitative
details of raw materials or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by products thereof;

h) accounts showing the quantitative details of goods used
in the provision of services, details of input services utilised and the services supplied;

i) separate accounts for works contract showing –

• the names and addresses of the persons on whose behalf the works
  contract is executed;

• description, value and quantity (wherever applicable) of goods or
  services received for the execution of works contract;

• description, value and quantity (wherever applicable) of goods or
  services utilized in the execution of works contract;

• the details of payment received in respect of each works contract; and

• the names and addresses of suppliers from whom he has received goods or
  services.

6) The books of account shall be kept at the principal place of business
and at every related place(s) of business mentioned in the certificate of
registration and such books of account shall include any electronic form of
data stored on any electronic devices. The data so stored shall be
authenticated byway of digital signature. Unless proved otherwise, if any
documents, registers, or any books of account belonging to a registered
person are found at any premises other than those mentioned in the
certificate of registration, they shall be presumed to be maintained by the
said registered person. If any taxable goods are found to be stored at any
place(s)other than those declared without the cover of any valid documents,
the proper officer shall determine the amount of tax payable on such goods
as if such goods have been supplied by the registered person.

7) Attention is invited to Circular No. 23/23/2017- GST dated 21.12.2017
which provides relaxation from maintenance of books of accounts relating to
additional place of business by a principal or an auctioneer for the
purpose of auction of tea, coffee, rubber etc. subject to prescribed
conditions.

8) Any entry in registers, accounts and documents shall not be erased,
effaced or overwritten, and all incorrect entries, otherwise than those of
clerical nature, shall be scored out under attestation and thereafter
correct entry shall be recorded, and where the registers and other
documents are maintained electronically, a log of every entry edited or
deleted shall be maintained. Further each volume of books of account
maintained manually by the registered person shall be serially numbered.

9) Period for preservation of accounts:

• All accounts maintained together with all invoices, bills of supply,
  credit and debit notes, and delivery challans relating to stocks,
  deliveries, inward supply and outward supply shall be preserved for
  seventy- two months (six years) from the due date of furnishing of annual
  return for the year pertaining to such accounts and records and shall be
  kept at every related place of business mentioned in the certificate of
  registration.

• A registered person, who is a party to an appeal or revision or any other
  proceedings whether filed by him or by the Commissioner, or is under
  investigation for an offence, has to retain the records pertaining to the
  subject matter of such appeal or revision or proceedings or investigation
  for a period of one year after final disposal of such appeal or revision
  or proceedings or investigation,or for the period specified above
  (seventy-two months), whichever is later.

10) Electronic Records: The following requirements have been prescribed for maintenance of records in electronic form.

• Proper electronic back-up of records in such manner that, in the event
  of destruction of such records due to accidents or natural causes, the
  information can be restored within a reasonable period of time.

• produce, on demand, the relevant records or documents, duly
  authenticated, in hard copy or in any electronically readable format.

• Where the accounts and records are storedel ectronically by any
  registered person, he shall, on demand, provide the details of such
  files, passwords of such files and explanation for codes used, where
  necessary, for access and any other information which is required for
  such access along with a sample copy in print form of the information
  stored in such files.

11) Records to be maintained by owner or operator of god own or warehouse and transporters:

The transporters, owners or operators of god owns, if not already
registered under the GST Act(s), shall submitthe details regarding their
business electronically on theCommon Portal in FORM GST ENR-01. A
uniqueenrolment number shall be generated and communicatedto them. A person
enrolled in any other State or Unionterritory shall be deemed to be
enrolled in the State orUnion Territory.

12) Every person engaged in the business of transporting goods shall
maintain records of goods transported, delivered and goods stored in
transit by him and for each of his branches. Every owner or operator of a
warehouse or god own shall maintain books of accounts, with respect to the
period for which particular goods remain in the warehouse, including the
particulars relating to dispatch, movement, receipt, and disposal of such
goods. The goods shall be stored in such manner that they can be identified
item wise and owner wise and shall facilitate any physical verification or
inspection, if required at any time.