Accounts & Records To Be Maintained Under GST (Sec. 35, 36 & Rules 56 to 58 of CGST Act)
Sec. 35 (1) - Every registered person shall keep and maintain at his Principle Place of Business, true and correct account of:
- Production or manufacture of goods;
- Inward and outward of goods or services or both;
- Stock of goods;
- Input tax credit availed;
- Output tax payable and paid; and
- Such other particulars as be prescribed
In case of multiple place of business, such related accounts records or accounts are to be kept and maintained at such place of business.
These accounts and records may also be kept and maintained in electronic form as per the manner prescribed.
Sec 35(3) -The commissioner may also notify additional accounts or documents to be maintained by such specified class of taxable persons.
Sec 35(4) - The commissioner may also relax the provisions of keeping and maintaining accounts and records in respect of any class of taxable persons if he feels that such class of persons are not in position to keep and maintain accounts and records as per the requirements of this section.
Sec 35(5) - Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C. (Rule 80(3)).
Sec 35(6) - Where registered person fails to account for the goods or services or both in accordance with section 35(1), the PO shall determine the amount of tax payable on the goods or service not accounted for, as if such goods or services have been supplied by him and penalty provisions of section 73 & 74 shall apply accordingly.
Period for Retention
Sec 36 - Every registered taxable person required to keep and maintain books of account or other records will maintain the books for at least 72 months, counted from the last date of filing of Annual Return.
In case of appeal or revision or any other proceedings or investigation, such records shall be retained for a period of 1 year after disposal of such appeal or revision or proceedings or investigation or for the period as specified above.
ACCOUNTS AND RECORDS RULES
Rule 56. Maintenance of accounts by registered persons.-
(1) Every registered person shall keep and maintain, in addition to the particulars mentioned in sub-section (1) of section 35, a true and correct account of the:
- goods or services imported or exported,
- supplies attracting payment of tax on reverse charge along with the relevant documents, including invoices,
- bill of supply,
- delivery challans,
- credit notes,
- debit notes,
- receipt vouchers,
- payment vouchers and
- refund vouchers.
(2) Every registered person, other than Composition dealer, shall maintain the accounts of stock in respect of:
- goods received and supplied by him, and
- such accounts shall contain particulars of the opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample and the balance of stock including raw materials, finished goods, scrap and wastage thereof.
(3) Every registered person shall keep and maintain a separate account of advances received, paid and adjustments made thereto.
(4) Every registered person, other than Composition dealer, shall keep and maintain :
- an account containing the details of tax payable (including tax payable under RCM),
- tax collected and paid,
- input tax, input tax credit claimed, and
- a register of tax invoice, credit notes, debit notes, delivery challan issued or received during any tax period.
(5) Every registered person shall keep the particulars of -
(a ) names and complete addresses of suppliers from whom he has received the goods or services chargeable to tax under the Act;
(b) names and complete addresses of the persons to whom he has supplied goods or services, where required under the provisions of this Chapter;
(c) the complete address of the premises where goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.
(6) If any taxable goods are found to be stored at any place(s) other than those declared under sub-rule (5) 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) Every registered person shall keep the books of account at the principal place of business and books of account relating to additional place of business mentioned in his certificate of registration and such books of account shall include any electronic form of data stored on any electronic device.
(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, the 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.
(9) Each volume of books of account maintained manually by the registered person shall be serially numbered.
(10) 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.
(11) Every agent shall maintain accounts showing the :
(a) particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately;
(b) particulars including description, value and quantity (wherever applicable) of goods or services received on behalf of every principal;
(c) particulars including description, value and quantity (wherever applicable) of goods or services supplied on behalf of every principal;
(d) details of accounts furnished to every principal; and
(e) tax paid on receipts or on supply of goods or services effected on behalf of every principal.
(12) Every registered person manufacturing goods shall maintain monthly production accounts showing quantitative details of:
- raw materials or services used in the manufacture and
- the goods so manufactured including the waste and by products thereof.
(13) Every registered person supplying services shall maintain the accounts showing quantitative details of:
- goods used in the provision of services,
- details of input services utilized and
- the services supplied.
(14) Every registered person executing works contract shall keep separate accounts for works contract showing -
(a) the names and addresses of the persons on whose behalf the works contract is executed;
(b) description, value and quantity (wherever applicable) of goods or services received for the execution of works contract;
(c) description, value and quantity (wherever applicable) of goods or services utilized in the execution of works contract;
(d) the details of payment received in respect of each works contract; and
(e) the names and addresses of suppliers from whom he received goods or services.
(15) The records under the provisions of this Chapter may be maintained in electronic form and the record so maintained shall be authenticated by means of a digital signature.
(16) Accounts maintained by the registered person together with all the invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply shall be preserved for the period as provided in section 36 and shall, where such accounts and documents are maintained manually, be kept at every related place of business mentioned in the certificate of registration and shall be accessible at every related place of business where such accounts and documents are maintained digitally.
(17) Any person having custody over the goods in the capacity of a carrier or a clearing and forwarding agent for delivery or dispatch thereof to a recipient on behalf of any registered person shall maintain true and correct records in respect of such goods handled by him on behalf of such registered person and shall produce the details thereof as and when required by the proper officer.
(18) Every registered person shall, on demand, produce the books of accounts which he is required to maintain under any law for the time being in force.
Rule 57. Generation and maintenance of electronic records.-
(1) Proper electronic back-up of records shall be maintained and preserved 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.
(2) The registered person maintaining electronic records shall produce, on demand, the relevant records or documents, duly authenticated by him, in hard copy or in any electronically readable format.
(3) Where the accounts and records are stored electronically 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.
The author is a practicing CA and is registered Insolvency Professional. He can also be reached at email@example.com