How Long Must You Keep Your Books Of Accounts Under GST

1. Introduction - The Ledger of Transparency

Many businessmen and professionals often wonder, "How long should we keep our books of accounts?" Fortunately, Section 36 of the Central Goods and Services Tax Act, 2017, provides clear guidance by specifying the required retention period for various accounts and records. But before we determine the duration for keeping these records, it's helpful to understand exactly which accounts and records need to be maintained-this is outlined in Section 35 of the CGST Act, 2017, along with Rules 56 to 58 of the CGST Rules, 2017. Together, these provisions lay out the essential framework for keeping proper records under GST.

Thus, Section 35 and Rules 56 to 58 outline what needs to be maintained, while Section 36 explains for how long - together, these form the essential pillars of documentation discipline under GST. These rules help ensure that each transaction, from purchase to payment, and from supply to settlement, stays verifiable, traceable, and auditable for the right amount of time.

Keeping good records is really about more than just following rules; it's about building trust and keeping things transparent. While a tax return might only take a day to file, the proof backing it up needs to be kept safe for many years. Just like in any professional area, clarity in GST isn't just helpful-it's essential for trust and credibility.

2. Overview of Record-Keeping-Section 35

Under Section 35, every registered person should keep true and correct records at their main business location. These include details about production, supplies of goods or services, stock levels, input-tax credits, and taxes owed or paid. If you have multiple business premises, each location needs to maintain its own set of records. The Commissioner can also require extra accounts for specific types of taxpayers like manufacturers, agents, or transporters. If you keep your records electronically, make sure they are signed digitally and easily accessible for authorities.

It's important to note that Section 35(6) states that if a taxable person fails to account for goods or services, the proper officer can assume these have been supplied by them, making them responsible for the tax. This means that not keeping proper records can lead to a presumption of supply, placing the burden of proof on the taxpayer. While Section 35 explains what records need to be kept, the specific period for retaining these records is outlined separately in Section 36, which we'll explore more under Heading No. 5 - Period of Retention, Data Security, and Practical Compliance.

3. The Heart of Record-Keeping under GST- Rule 56

Rule 56 of the CGST Rules, 2017, provides a clear overview of how to maintain proper accounts. It starts with an essential requirement that every registered individual keep accurate and truthful records of all goods produced, manufactured, received, and supplied, as well as the services rendered or received. The rule then outlines key compliance aspects through specific sub-rules.

Sub-rules (1) to (3) emphasise the importance of maintaining detailed accounts related to production or manufacturing, inward and outward supplies, inventory of goods-including raw materials, semi-finished, and finished products-as well as any goods lost, destroyed, or disposed of. They also cover input tax credits claimed, output tax obligations, and details on suppliers and recipients. For those involved in providing services, it's equally important to keep records of services offered, services received, and related documentation.

Sub-rules (4) to (6) focus on keeping good records. It's important for everyone registered to maintain a clear, numbered record of all tax-related documents like invoices, bills, credit and debit notes, delivery challans, and vouchers-whether they are issued, cancelled, or anything in between. Additionally, keeping careful track of any advances received, adjusted, refunded, and taxes paid on them is essential. The rules also emphasize recording details of any goods that are lost, stolen, destroyed, written off, or given away as gifts or free samples. This helps ensure that input-tax credits can be properly identified and, if needed, adjusted according to Section 17(5)(h).

Sub-rules (7) to (9) outline where and how records should be kept. All accounts are to be maintained at the main place of business. If there are multiple locations, relevant records should be kept at each one. Using electronic methods is allowed, as long as the data can be easily accessed, printed, and authenticated with a digital signature. Regular backups are also essential to avoid losing important information. Officers have the right to review these records whenever necessary.

For manufacturers, sub-rules (10) to (12) guide you to keep clear, detailed records of the raw materials you receive, how you use them, the finished products you create, as well as any by-products and waste generated. It's important to update these accounts daily to ensure everything is accurately tracked. The Commissioner might also request additional records in sectors such as mining, quarrying, works contracts, or software development, where the specific nature of transactions warrants special attention.

Sub-rules (13) to (15) cover job work and reverse-charge situations. It's essential for every principal to keep clear records of goods sent for job work, including details like quantity, description, the job-worker's information, and records of goods received back or supplied from the job-worker's location. If goods are not received within the timeframe set under Section 143, that also needs to be recorded. Those responsible for reverse charge payments should maintain thorough documentation of these supplies, such as self-invoices and payment vouchers. To ensure trust and accountability, electronic records should be protected from tampering, and any changes or deletions should be traceable, providing a clear audit trail that enhances transparency.

Sub-rules (16) to (20) extend these critical obligations to special categories like agents, ensuring everyone involved is covered. transporters, and warehouse operators. Agents must maintain principal-wise accounts showing the goods or services handled, the tax paid, and the commission earned. Transporters must record goods transported, consignment details, vehicle numbers, and e-way bill references. Warehouse operators must maintain goods-wise and owner-wise records of stock received, stored, and dispatched. Mixed and composite suppliers must maintain clear segregation of taxable and exempt supplies. Finally, sub-rule (20) emphasises that all such records, whether in manual or electronic form, must be preserved safely and produced whenever required by the proper officer. Thus, Rule 56 is not merely procedural but philosophical - it establishes a culture of continuous documentation and audit-readiness, which is the true spirit of GST.

4. Special Provisions for Transporters and Warehouse Owners-Rules 57 and 58

Rules 57 and 58 effectively broaden the scope of documentation requirements, making sure everyone involved in transporting or storing goods, not just registered suppliers, stays compliant. Rule 57 encourages transporters and warehouse operators to keep detailed, accurate records of all goods, including consignor, consignee, and vehicle registration details, backed by supporting documents like invoices, delivery challans, and e-way bills. These records should be readily available for verification whenever needed. Meanwhile, Rule 58 emphasises that unregistered individuals engaged in warehousing must enrol on the common portal using Form GST ENR-01 and keep precise records of goods and owners. By doing so, it helps close any gaps that might allow tax evasion or credit misuse, ensuring that every part of the supply chain - from manufacturers to transporters to warehouse managers - upholds the spirit of GST and stays accountable.

5. Period of Retention, Data Security and Practical Compliance- Section 36

Here's a friendly overview of the record retention rules under Section 36 of the CGST Act, 2017: Organisations need to keep their records for seventy-two months (that's six years) starting from the due date of the annual return for each financial year. For example, for FY 2024-25, with the annual return due on December 31, 2025, all related books, registers, and supporting documents should be maintained until December 31, 2031. Plus, if there's an ongoing appeal, revision, or legal proceeding before an authority or court, this period is automatically extended. In such cases, documents must be kept for an additional year after the final decision, even if the six-year period has already passed. This ensures that all relevant documents are preserved as long as the matter remains under review, recognising that the importance of a document doesn't end when it's filed.

To appreciate this better, consider the following illustrations.

Example 1 - Regular Retention Period:

Sonia Infrastructure Pvt. Ltd. successfully filed its annual return for FY 2024-25 on 15 November 2025, well before the deadline of 31 December 2025. Remember, under Section 36, the six-year retention period is counted from the due date, not the filing date. That means Sonia Infrastructure should keep all GST records - including invoices, e-way bills, ledgers, reconciliation statements, and supporting documents - until 31 December 2031. Even if the company updates its accounting software or moves to a new office, these records must remain accessible and reproducible whenever required. The Department has the legal right to request these records at any time within that period.

Example 2 - Retention Extended Due to Pending Appeal (Proviso to Section 36): Kirti Ltd., a company involved in commercial construction, happily filed its annual return for FY 2023-24 on December 25, 2024, just a few days before the deadline of December 31, 2024. As per the rules, records need to be kept until December 31, 2030, which is six years after the deadline. Additionally, whenever a show-cause notice is issued, it should be issued before June 30, 2029, at least six months before the adjudication deadline on December 74, 10. In this case, the notice was issued exactly on June 30, 2029, and the order was passed on December 20, 2029, comfortably within the limit. After the appeal was finally decided in October 2032, the company is advised to keep all relevant documents, such as books, invoices, and correspondence, until October 2033 - giving them an extra year beyond the usual six-year period- to ensure everything is well-preserved for any future reference.

This example highlights an important compliance tip - record retention isn't just about time; it's driven by events. When proceedings start under Sections 73 or 74, the retention period automatically extends until a year after the entire process of adjudication and appeal is finished. In today's world, electronic record-keeping has become essential. Businesses can keep digital or cloud-based records as long as they're authentic, easy to access, tamper-proof, and printable whenever needed. Remember to save audit logs, edit trails, and version histories as proof of data integrity. Regular backups to multiple secure servers help ensure your records are safe even if something unexpected happens, such as a system failure or a cyberattack. If your business has multiple branches or registrations, each one should keep its own records of transactions, stock, and ITC, even if the overall data is reported centrally.

In essence, Section 36 teaches a timeless truth of compliance - time may erase memory, but it should never erase records. Every file preserved today is a potential shield tomorrow.

6. Inspection, Audit, and Penal Consequences-Sections 67 and 122

The proper officer is empowered under Section 67 to inspect accounts, records, and documents to verify the correctness of declarations, returns, and credits. Non-maintenance of prescribed accounts attracts a penalty under Section 122(1)(xvi), amounting to ₹10,000 each under the CGST Act and respective SGST Act or the tax involved, whichever is higher. Further, under Section 35(6), any unaccounted goods or services may be deemed to have been supplied by the person, leading to tax, interest, and even prosecution in grave cases. Thus, inadequate record-keeping is not merely a technical lapse; it can lead to severe fiscal and reputational consequences. In essence, compliance with accounting obligations under GST is a taxpayer's first line of defence - no record means no relief.

7. GST Books of Accounts Compliance at a Glance

8. The Essence of the Law - Record-Keeping as a Reflection of Ethics

At its heart, accounting is more than just crunching numbers - it's about capturing the truth. Even though the GST law might seem complex, its foundation is built on strong moral values. It encourages not just following tax rules but also acting with integrity. Every invoice you handle, every reconciliation you complete, and each stock register you maintain speaks to your dedication to honesty. Beneath the technical jargon like "Rule 56" or "Section 35," there's a simple but powerful message - being open and honest in your records reflects the integrity of your character.

A true professional recognises that books of account go beyond financial statements; they reflect a business's core values. When a company keeps its records with care, it shows not only efficiency but also a strong sense of responsibility toward its employees, customers, and the wider community. When GST officers or auditors review a taxpayer's ledger, what they're really seeing is a glimpse into that organisation's discipline and ethical standards.

The renowned economist Adam Smith once beautifully pointed out that "the morality of a nation is measured not by its laws but by how honestly its citizens comply with them." With this in mind, GST record-keeping is more than just a way to avoid penalties - it's about nurturing India's growing culture of trust-based taxation.

"कानून की किताबें सिर्फ नियम नहीं बतातीं,वे एक राष्ट्र की निष्ठा की कहानी भी कहती हैं।"The law is not just a set of rules - it tells the story of a nation's integrity.

9. The Discipline of Documentation

In the architecture of GST, records are the unseen beams that support the entire compliance framework. Each return filed, credit claimed, refund approved, and these critical records are backed up and audited. The strength of the system comes from its perfect balance - where automation works hand in hand with accountability, and precise documentation helps keep everything on track.

For a Chartered Accountant, maintaining records under GST goes beyond just meeting legal requirements - it reflects a deep sense of professional integrity. A well-organized file today could help safeguard a client's future, and a carefully verified ledger now might protect a business in legal matters years down the line. So, good documentation isn't just about filling out forms - it's about foresight, patience, and taking pride in your work. doing things right.

The law appreciates accuracy, and keeping good records is its clearest expression. Each page we file and every register we reconcile offers a gentle reassurance - that this effort is rooted in honesty and openness. By honestly maintaining our records, we help build a larger community in which the government trusts taxpayers, and taxpayers, in turn, trust the system.

"खातों की पंक्तियों में बस आंकड़े नहीं बसते,उनमें हमारी नीयत की सच्चाई लिखी होती है।जो दस्तावेज़ संभाले रखे, वही भरोसा निभा गया,कानून भी मुस्कुरा उठा - जब ईमानदारी दिखी होती है।"

In every ledger lie more than numbers - they record our intent's truth. The one who preserves his records preserves his integrity too. And when honesty meets law in perfect alignment, Even the statute smiles - for compliance has found its soul.