Introduction
The GST law requires the registered person to maintain specified accounts and records at the principal place of business. These records also include the records relating to the production/manufacturing of goods, inward and outward supply of goods or services, stock of goods, input tax credit availed, etc.
This document discusses the provisions relating to the accounts and records that a registered person is required to maintain under the GST laws.
1. about Accounts and Records under GST
The provisions relating to the maintenance of accounts and records under the GST laws [1] are discussed in this document in the below manner:
(a) Records to be maintained under GST: There are few general records that a registered person is required to maintain under the GST laws such as records relating to stock of goods, detail of provision of services to be maintained by a service provider, records relating to the input tax credit, etc. In this para, these records are discussed in detail.
(b) Template of various records: The draft templates of various records based on the requirement of law are prepared and covered in this part of the document.
(c) Additional points relating to records to be maintained under GST: In this para few additional points relating to maintenance of accounts and records such as a place where accounts and records are required to maintain, period of preservation of accounts, maintaining the accounts in electronic form, treatment of wrong entries, etc. are discussed.
Each of the above points are discussed in detail in the below-mentioned paragraphs.
2. Records to be maintained under GST laws
Under the GST law, every registered person is required [2] to keep and maintain a true and correct account of the specified activities at his principal place of business as mentioned in the certificate of GST registration.
The provisions relating to the same are discussed in the below-mentioned paragraphs.
2.1. General accounts to be maintained by a registered taxpayer
The general accounts that are required to be maintained by a registered person are as follows:
| Sl. No. | Type of record | Detail about record |
| (a) | Production or manufacture of goods | The registered person, being a manufacturer of goods, is required [3] to maintain monthly production accounts showing quantitative details of raw material or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by-products thereof. |
| (b) | Inward and outward supply of goods or services or both | The registered person is required to maintain the accounts in respect of the inward and outward supply of goods or services or both. |
| (c) | Stock of goods | • Supplier of goods: A registered person (other than a composition taxpayer) is required [4] to maintain the accounts in respect of goods received and supplied by him. The accounts maintained in this regard should 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. • Supplier of services: The registered person supplying the services would be required [5] to maintain the accounts showing the quantitative details of goods used in the provision of services, details of input services utilized and the services supplied. |
| (d) | Input tax credit availed | The registered person (other than the composition taxpayer) is required[6] to maintain an account containing the details of tax payable including tax payable under reverse charge, tax collected and paid, input tax credit (‘ITC’), ITC claimed, along with the register of tax invoice, credit notes, debit notes, delivery challan issued or received during any tax period. |
| (e) | Output tax payable and paid | |
| (f) | Goods or services imported or exported | The registered person is also required to maintain a true and correct account of these two activities along with the relevant documents, including invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers and refund vouchers. |
| (g) | Supplies attracting payment of tax on reverse charge | |
| (h) | Maintaining details of accounts for advances | The registered person is required [7] to maintain a separate account for the advance received, paid and adjustments made thereof. |
The draft templates of the above general records are also separately provided in para 3 of this document.
The law also requires to maintain the below details [8] of supplier and recipient:
(a) Name and complete address of the supplier(s) from whom goods or services chargeable to tax under the Act, have been received
(b) Name and complete address of the person(s) to whom supplies have been made
(c) The complete address where the goods are stored and the address where goods in transit (if any) are stored by him.
The law provides that where any taxable goods are found [9] to be stored at any place other than above without the cover of any valid document, then the proper officer would determine the tax payable on such goods as if such goods have been supplied by the registered person.
2.2. Specific records to be maintained by a registered taxpayer
Along with the general records, there are certain specific records that are required to be maintained by some specified registered taxpayers. These are discussed in the below-mentioned paragraphs separately.
2.2-1. Details to be maintained by works contractor
The registered person executing the works contract would be required [10] to keep separate accounts for the works contract showing the details discussed in the below-mentioned table:
| Sl. No. | Particulars |
| (a) | The name and addresses of the persons on whose behalf the work 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 detail of payment received in respect of each works contract |
| (e) | The names and addresses of the supplier from whom he has received goods or services |
2.2-2. Records to be maintained by transporter and owner/operator of godown or warehouse
The GST law requires [11] every owner/operator of the warehouse or godown or any other place used for the storage of goods and every transporter to maintain the records of the consigner, consignee and other specified details. The given details are to be maintained [12] irrespective of the fact that the transporters, owners, or operators of the godown are not registered under the GST law.
In this regard, it is provided [13] that the person engaged in the business of transporting goods would be required to maintain the records of the goods transported, delivered and goods stored in transit by him along with the GSTIN of the registered consigner and consignee for each of his branches.
Further, the owner/operator of a warehouse/godown is required [14] to maintain books of account with respect to the period for which particular goods remain in the warehouse, including the particulars relating to the dispatch, movement, receipt and disposal of such goods. Notably, the owner/the operator of the godown is also required[15] to store the goods in a manner that they can be identified item-wise and owner-wise and it also facilitates any physical verification or inspection by the proper officer on demand.
The law further provides [16] that where the transporter or the owner/operator of the godown/warehouse is not registered under the GST law, they would be required to submit the details regarding his business and enroll themselves under the GST law for furnishing the specified details. The provisions relating to enrolment under the GST law are discussed in the ensuing paragraphs.
Manner of enrolling as a transporter or owner/operator of godown
The law provides [17] that the transporters, owners, or operators of the godown who are not registered under the GST law would be required to submit the details regarding their business on the GSTN portal in Form GST ENR-01. Upon validation of the details furnished, a unique enrolment number would be generated and communicated to the person.
The person who has enrolled in any other State/Union territory would be deemed [18] to be enrolled in the State or Union territory.
The details of the business furnished by the above persons in Form GST ENR-01 may amend such details on the GSTN portal.
Unique common enrolment number for registered transporters
Notably, for the e-way bill requirement, a transporter who is registered in more than one state/UT having the same PAN number may apply[19] for a unique common enrolment number by submitting the details in Form GST ENR-02 using any of his GSTIN. Upon validation of the details furnished, a unique enrolment number would be generated and communicated to the transporter. Where the transporter has generated the unique enrolment number, he would [20] not be eligible to use any of his GSTIN for the e-way bill requirements.
2.2-3. Records to be maintained by Carrier/ Clearing and Forwarding Agent
The law provides [21] that the 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 would be required to maintain true and correct records in respect of such goods handled by him on behalf of such a registered person.
Such a person would be required to be produced the details as and when required by the proper officer.
2.2-4. Accounts required to be maintained by an agent
The law provides that an agent [22] is required to maintain [23] the accounts depicting the following particulars:
(a) Particulars of authorization received from each principal to receive or supply the goods and services on the behalf of each such principal separately
(b) Particulars including the description, quantity (wherever applicable), and value of goods or services received on behalf of every principal
(c) Particulars including the description, quantity (wherever applicable), and value of goods or services supplied on behalf of every principal
(d) Details of accounts furnished to every principal
(e) Tax paid on receipts or on supply of goods or services effected on behalf of every principal
2.2-5. Records to be maintained where goods are taken out of India for exhibition/export promotion consignment
When the goods are sent out of India for exhibition or on a consignment basis for export promotion, it does not constitute as a supply under GST (except where it satisfies the conditions laid down in Schedule I of the CGST Act) as there is no consideration involved in it. These goods at the time of export are accompanied by a delivery challan and the invoice is issued as per the tax invoicing provisions. In this regard, the CBIC has clarified [24] that the person dealing with the specified goods out of India would be required to maintain the record as per the specified format.
2.3. Additional accounts or documents to be notified by Commissioner
The law empowers [25] the Commissioner to notify a class of taxable persons to maintain additional records or documents for such purpose as may be specified under a notification issued in this regard. Notably, the commissioner has not notified any class of persons as of now.
2.4. Special manner of maintaining records for notified class of persons
The law provides [26] that where the Commissioner considers that any class of taxable persons is not in a position to keep and maintain accounts as per the GST law, then he may permit such class of persons to maintain accounts in such manner as may be prescribed for a reason to be recorded in writing. Notably, the government has not prescribed any rules in this regard.
3. Additional Points relating to records to be maintained under GST
The additional points relating to the maintenance of accounts and records under GST are discussed in the below-mentioned paragraphs.
4.1. Treatment where registered person fails to account for goods or services
Where the registered person fails to account for the goods or services, the proper officer can determine [27] the amount of tax payable on the goods or services that are not accounted for as if such goods or services had been supplied by such person. The provisions relating to the demand and recovery would apply accordingly for the determination of such tax. Notably, the given provision would be subject to exceptional scenarios where goods are lost, stolen, destroyed, written off, or disposed of by way of gift or free samples [28].
4.2. Place where accounts and records are required to be maintained under GST
Every registered person is required to keep and maintain [29] a true and correct account of the specified records at his principal place of business, as mentioned in the certificate of registration. In case of more than one place of business is specified in the certificate of registration, the accounts relating to each place of business are required to be kept at such an additional place of business[30] .
Where books of accounts are maintained manually [31], each volume of books of account shall be serially numbered.
Notably, the books of accounts maintained at the principal place of business or the additional place of business, as the case maybe, would include [32] any electronic form of data stored on any electronic device.
Clarification on maintaining accounts & records when goods are kept at transporter’s warehouse/ godown
It has been clarified [33] that where goods are kept at the transporter’s warehouse/ godown, such transporter is required to maintain accounts and records as a warehouse keeper. Also, the recipient taxpayer is required to maintain accounts and records at the principal place of business as per the provisions of the GST law [34].
Clarification on accounts & records to be maintained by principal or auctioneer for purpose of auction of tea, coffee, rubber, etc.
For the purpose of the auction of tea, coffee, rubber, etc., the GST law requires both the principal and the auctioneer to maintain the books of accounts relating to their additional place of business in such places. Upon the filing of the representation by the industry, the CBIC clarified [35] the following points for the principal and auctioneer:
(a) The principal and the auctioneer of tea, coffee, rubber etc. are required to declare warehouses where such goods are stored as their additional place of business.
(b) Both the principal and the auctioneer are required to maintain the books of accounts relating to each and every place of business in that place itself. However, in case any difficulties are faced in maintaining the books of accounts, the CBIC further clarified that they may 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).
(c) Such principal or auctioneer shall intimate their jurisdictional proper officer in writing about the maintenance of books of accounts relating to additional place(s) of business at their principal place of business.
(d) The principal or the auctioneer would be eligible to avail input tax credit (ITC) subject to the other conditions of the GST law.
Further, where the buyer wants to store the goods purchased through auction in the warehouses, he would also be required to disclose the warehouse as his additional place of business. The CBIC has further clarified [36] that for the purpose of supply of tea through a private treaty, the principal and an auctioneer may also comply with the said provisions.
4.2-1. Maintaining accounts and records in electronic form
The accounts and records may be maintained by the registered person in an electronic form [37]. The data so stored should be authenticated [38] by way of a digital signature. The following requirements [39] have been prescribed for the maintenance of records in an electronic form:
(a) Proper electronic backup of records should be maintained and preserved in such a 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
(b) The registered person must produce, on-demand, the relevant records or documents, duly authenticated, in hard copy or any electronically readable format
(c) The registered person, shall on demand, provide the details of such files, passwords of such files an explanation for codes used, where necessary, for access, and any other information which is required for such access along with the sample copy in print form of the information stored in such file
4.2-2. where accounts and records are maintained at place other than the registered place of business
Where any records or books of accounts belonging to the registered person are found at a place other than the place mentioned in the registration certificate, then such records would be presumed [40] to be maintained by such a registered person. This is subject to an exception where the registered person proves otherwise.
4.3. Period of retention of accounts and records under GST
The books of accounts and other relevant records that are kept and maintained[41] as per the law are required to be retained until the expiry of 72 months from the due date of furnishing of the annual return for the year pertaining to such accounts and records. The given period of retention would also apply[42] to all invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply, and outward supply.
The law further provides[43] that the given accounts and records are required to be retained where such accounts and documents are maintained manually, and be kept at every related place of business mentioned in the registration certificate and should be accessible at every related place of business where such accounts and documents are maintained digitally.
4.3-1. Additional period of retention in case of appeals and investigation
The law provides [44] an additional period for the retention of accounts and records in the following cases:
(a) Where the registered person is a party to an appeal, revision or any other proceedings before the Appellate Authority/ Revisional Authority/ Appellate Tribunal/ Court (whether filed by Commissioner or registered persons)
(b) Where the registered person is under investigation for an offence [45] as per the offences and penalties chapter under the law
In the above cases, the law requires the registered person to retain the books of accounts and other records pertaining to the subject matter of such appeal/ revision/ proceedings/ investigation for later of the following periods:
(a) 1 year after the final disposal of such appeal, revision, etc., or
(b) The general period of retention i.e. 72 months from the due date of furnishing of the annual return
4.4. Treatment of incorrect entry or its deletion in accounts/records under GST
The law provides [46] that any entry in registers, accounts and documents should not be erased, effaced, or overwritten. It further provides that all incorrect entries, other than those of clerical nature would be scored out under attestation, and thereafter the correct entry should be recorded. Further, where the registers and other documents are maintained electronically, a log of every entry edited or deleted should be maintained.
4.5. Production of accounts maintained under any law to GST authorities
The law requires [47] the registered person to produce the books of account which are required to be maintained under ‘any’ law for the time being in force as and when demanded by the GST authorities.
References
1. GST legislation refers to Central Goods and Services Tax Act, 2017 (‘CGST Act’), Integrated Goods and Services Tax Act, 2017 (‘IGST Act’), State Goods and Services Tax Act, 2017 (‘SGST Act’), Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) and Union Territory Goods and Services Tax Act, 2017 (‘UTGST Act’)
2. Section 35(1) of the CGST Act
3. Rule 56(12) of the CGST Rules
4. Rule 56(2) of the CGST Rules
5. Rule 56(13) of the CGST Rules
6. Rule 56(4) of the CGST Rules
7. Rule 56(3) of the CGST Rules
8. Rule 56(5) of the CGST Rules
9. Rule 56(6) of the CGST Rules
10. Rule 56(14) of the CGST Rules
11. Section 35(2) of the CGST Act
12. Section 35(2) of the CGST Act read with Rule 58(1) of the CGST Rules
13. Rule 58(4) (a) of the CGST Rules
14. Rule 58(4) (b) of the CGST Rules
15. Rule 58(5) of the CGST Rules
16. Rule 58(1) of the CGST Rules
17. Section 35(2) of the CGST Act read with Rule 58(1) of the CGST Rules
18. Rule 58(2) of the CGST Rules
19. Rule 58(1A) of the CGST Rules
20. Proviso to Rule 58(1A) of the CGST Rules
21. Rule 56(17) of the CGST Rules
22. as referred in Section 2(5) of the CGST Act
23. Rule 56(11) of the CGST Rules
24. Circular No. 108/27/2019-GST, dated 18-7-2019
25. Section 35(3) of the CGST Act
26. Section 35(4) of the CGST Act
27. Section 35(6) of the CGST Act
28. as covered under Section 17(5) (h) of the CGST Act
29. Section 35(1) of the CGST Act read with Rule 56(7) of the CGST Rules
30. First proviso to Section 35(1) of the CGST Act
31. Rule 56(9) of the CGST Rules
32. Rule 56(7) of the CGST Rules
33. Para 7 of Circular No. 61/35/2018-GST, Dated 04-09-2018
34. under Rule 56 and Rule 57 of the CGST Rules
35. Circular No.23/23/2017-GST, Dated 21-12-2017
36. Circular No.47/21/2018-GST, Dated 8-6-2018
37. Second proviso to Section 35(1) of the CGST Act
38. Rule 56(15) of the CGST Rules
39. Rule 57 of the CGST Rules
40. Rule 56(10) of the CGST Rules
41. Section 36 of the CGST Act
42. Rule 56(16) of the CGST Rules
43. Rule 56(16) of the CGST Rules
44. Proviso to Section 36 of the CGST Act
45. As per Chapter XIX of the GST law
46. Rule 56(8) of the CGST Act
47. Rule 56(18) of the CGST rules.