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Accounts and Records to be maintained under GST

As per Section 35 of the CGST Act, 2017 every registered person is required to keep and maintain books of account at his principal place of business, as mentioned in the certificate of registration.

Further, where 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.

However, in case of supply of tea, coffee, rubber, etc. where the auctioneer claims ITC in respect of the supply made to him by the principal before the auction of such goods and the said goods are supplied only through auction. Then, both the principal and the auctioneer are required to maintain the books of accounts relating to the additional place(s) of business at their principal place of business instead of such additional place(s). [Refer Circular No.23/23/2017-GST dated 21.12.2017]

Basic accounts required to be maintained by a person at the principal place of business?

As per Section 35 of the CGST Act, 2017 read with the CGST Rules, 2017, every registered person shall keep and maintain the following accounts on a true and correct basis:

(a) Production or manufacture of goods;

(b) Inward or outward supply of goods or services of both;

(c) Stock of goods;

(d) Input tax credit availed;

(e) Output tax payable and paid;

(f) Such other particulars as may be prescribed.

Additional accounts to be maintained by the registered person

Every registered person, in addition to the records to be maintained under section 35 of the CGST Act, is required to maintain following additional accounts on a true and correct basis:

1. Goods or services imported or exported;
2. Supplies attracting payment of tax on reverse charge along with relevant documents (including invoices, bill of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers);
3. Accounts of stock in respect of goods received and supplied – containing particulars of opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample and balance of stock including raw materials, finished goods, scrap and wastage thereof (these details need not be maintained by a composition dealer);
4. Advances received, paid and adjustments made thereto;
5. Tax payable on reverse charge basis;
6. Tax payable, tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit notes, debit notes, delivery challan issued or received during any tax period (Not applicable to composition dealer);
7. Names and complete addresses of suppliers from whom he has received the goods or services;
8. Names and complete addresses of the persons to whom he has supplied the goods or services; and
9. Complete addresses of the premises where the goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.

Books of Accounts to be maintained by Agent

As per Rule 56(11) of the CGST Rules, 2017, every agent referred in section 2(5) of the CGST Act, 2017 shall maintain accounts containing:

1. particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately;

2. particulars including description, value and quantity (wherever applicable) of goods or services received on behalf of every principal;

3. particulars including description, value and quantity (wherever applicable) of goods or services supplied on behalf of every principal;

4. details of accounts furnished to every principal; and

5. tax paid on receipts or on supply of goods or services effected on behalf of every principal.

Records to be maintained by the provider of works contract service

As per Rule 56(14) of the CGST Rules, 2017, the registered person providing works contract service shall maintain the accounts showing-

1. the names and addresses of the persons on whose behalf the works contract is executed;
2. description, value and quantity (wherever applicable) of goods or services received for the execution of works contract;
3. description, value and quantity (wherever applicable) of goods or services utilized in the execution of each works contract;
4. the details of payment received in respect of each works contract; and
5. the names and addresses of suppliers from whom he has received goods or services.

Record to be maintained by custodian of goods

As per Rule 56(17) of the CGST Rules, 2017, the clearing and forwarding agent or the carrier of goods shall maintain true and correct records in respect of such goods handled by him on behalf of the registered person.

Books of Accounts to be maintained by owner/ operator of a warehouse or godowns/ transporter

Every owner/ operator of warehouse or godowns or any other place used for storage of goods and transporter (whether registered or not) needs to maintain records of consigner, consignee and other relevant details as under:

1. For Transporter:
• GSTIN of registered consignor/consignee
• Goods transported
• Goods delivered
• Goods stored in transit by him

2. For owner/ operator of a warehouse or godowns:
• Accounts related to that period for which goods remain with him
• Details of dispatch, movement, receipt and disposal of goods

Further, owner/ operator of warehouse or godowns should store the goods in such a way that they can be identified item-wise and owner-wise and shall facilitate any physical verification/ inspection by proper officer on demand.

Maintenance of Accounts in case more than one place of Business

where 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. Moreover, in case of additional places of business, the accounts relating to each place of business shall be kept at such places of business concerned (provided such place is specified in the certificate of registration). Such books of account shall include any electronic form of data stored on any electronic device.

Whether accounts can be maintained in the electronic form?

Yes, the registered person may keep and maintain such accounts and other particulars in the electronic form, however the said records must be authenticated by way of digital signatures. Proper electronic back-up of records shall be maintained and preserved in such manner so that the information can be restored within a reasonable period of time in the event of destruction of such records due to accidents or natural causes. The same shall be produced on demand along with its sample hard copy and passwords, codes, etc.

Exception for for maintenance of books of account

As per provisions of section 35(4), in case any class of taxable persons is not in a position to keep and maintain accounts in accordance with the provisions of section 35, the Commissioner may permit such class of taxable persons to maintain accounts in such manner as may be prescribed after recording the reasons for the same in writing.

Audit of accounts maintained under GST

Every registered person whose aggregate turnover during a financial year exceeds the prescribed limit of ` 2 Crore, shall get his accounts audited by a chartered accountant or a cost accountant and shall submit to the proper officer a copy of the audited annual accounts, the reconciliation statement (duly certified, in FORM GSTR-9C) under Section 44(2) and such other documents in the form and manner as may be prescribed.
Further, any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force shall be exempted by this provision of audit.

Applicability of provisions of Sections 73 or 74 for not maintaining books of account

Where the registered person fails to account for the goods and/or services in accordance with Section 35(1), the proper officer shall determine the amount of tax payable on the goods and/or services that are not accounted for, as if such goods and/or services had been supplied by such person, and the provisions of Sections 73 or 74, as the case may be, shall apply, mutatis mutandis, for determination of such tax.

Note:
• Under section 17(5)(h), input tax credit shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples and
• Section 73 & 74 are the demand-related provisions under the Act.

Other Provisions for maintenance of Accounts under GST

  • Books of accounts to be maintained serially
  • As per Rule 56(13) of the CGST Rules, 2017, a supplier of service is required to maintain quantitative details of goods used in provision of services, details of input services utilized and services supplied.
  • As per Rule 56(8) of the CGST Rules, 2017, any entry in the register, accounts and documents shall not be erased, effaced or overwritten.
  • As per Rule 56(8) of the CGST Rules, 2017, if incorrect entries (except those of clerical nature) are made in the registers, accounts or documents, they shall be scored out under attestation. Thereafter, the correct entry shall be recorded. Further, where the registers and other documents are maintained electronically, a log of every edited or deleted entry shall be maintained.
  • As per Rule 56(10) of the CGST Rules, 2017, unless it is proved otherwise, if any document, register, or books of accounts 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.
  • As per Rule 56(12) of the CGST Rules, 2017, every registered person manufacturing goods shall maintain monthly production accounts showing quantitative details of-
    1. Raw materials or services used in the manufacture, and
    2. Goods so manufactured including the waste and by products thereof.

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