Accounts and Records GST: According to Section 35 of the CGST Act, 2017, each entity who is enrolled for GST is obligated to provide relevant data and accounts in his or her primary place of business. Additionally, any statement made in financial accounts is not to be modified or eliminated.
- Who Is Responsible for Maintaining GST Records and Accounts?
- What Books of accounts must be maintained in order to comply with GST?
- What book of accounts shall be maintained in the situation of an agent [Rule 1(11)]?
- What book of accounts must be maintained by an authorized individual carrying out a work contract [Rule 1(14)]?
- What records must the proprietor of a warehouse or godown maintain?
- What is the duration for which books of accounts and other records must be retained [Rule 1(16)]?
- Production of accounting books [Rule 1(18)]
- Accounts Maintenance Rules and the Commissioner’s power and authority
- Repercussions of Failure to Maintain Accurate Records
The following entities are obligated to maintain records and accounts under GST:
- The owner;
- The manager of a storehouse or godown;
- Taxpayer whose total annual revenue exceeds INR 2 crores in any fiscal year;
Every registered individual is bound to maintain the relevant records:
- Goods are produced or manufactured.
- Goods and services are supplied both within and outward (Purchase and Sales Register).
- Stock goods (Inventory Register).
- The input tax credit was received (Electronic Credit Ledger).
- Payable and paid output tax (Electronic Liability and Electronic Cash Ledger).
- Other specifics may be legally required.
- Import and export statistics for products and services.
- Records of supplies generate reverse charge payment, comprising invoicing, bills of supply, supply challenges, credit notes, debit notes, receipt vouchers, payment vouchers, refund coupons, e-way bills, and the associated documents.
Other Key Aspects that Should be Mentioned
- A person is expected to appropriately record the information of commodities that have been misplaced, stolen, damaged, cancelled off, or given as a present or freebie in its accounting books.
- If the registered person fails to consider the goods or services or both, the statutory authority shall assess the tax liability on the unaccounted-for products or services or perhaps both.
- If any paperwork, registers, or books of account attributable to a designated user are detected at any place other than those indicated in the certificate of registration, they are widely considered to be maintained by the very same designated user unless demonstrated differently.
- Where more than one business entity is explicitly mentioned in the certificate of registration, the accounts corresponding to each place of business must always be kept at these places of business.
An agent must additionally have the following extended information on file:
- Exact details of authorization acquired out of each principal to collect or provide goods or services favouring such principal independently.
- Specifics of goods or services rendered on account of each principal, comprising descriptions, value, and quantity (where relevant).
- Exact details of products or services provided favouring every principal, indicating description, value, and quantity (if relevant).
- Account details are forwarded to each principle.
- Taxes are collected on receipts or the allocation of goods or services on account of each principle.
What Book Of Accounts Must Be Maintained By An Authorized Individual Who Is Carrying Out A Work Contract [Rule 1(14)]?
Every registered person who carries out a works contract must also keep independent accounts for each work contract, which must illustrate:
- The contact information of the individuals on whose authority the works contract is being implemented out.
- Description, value, and quantity (where relevant) of goods or services obtained to complete the project of a contract job.
- The description, value, and quantity (where appropriate) of products or services employed in implementing the works contract.
- The specific details of the compensation received for each job contract.
- What Book Of Accounts Must Be Maintained By An Authorized Individual Who Is Carrying Out A Work Contract [Rule 1(14)]?The identities and locations of suppliers from whom he obtained goods or services.
According to Section 35(2) of the CGST Act, 2017, each landlord or operator of a warehouse or godown and every other area used for warehousing, and every other transporter, whether authorized or not, must maintain copies of the consigner, consignee, and other pertinent insights of the products in the procedure provided.
Thus according to Rule 58 of the CGST Rules, 2017, any individual who is obliged to hold records under Section 35(2) of the CGST Act, 2017, but is not officially registered, should therefore submit Form GST ENR-01, after that which a distinctive enrollment number is issued and notified immediately to the said person.
Accounts retained by the relevant authority, along with all invoices, cash receipts of supply, credit and debit notes, and shipping challans attributed to equities, deliveries, inward consumption, and outward supply, must always be continued to keep for seventy-two months from the given deadline of providing the annualized report for the year concerning to such books and accounts (as prescribed under section 36).
Where such books and paperwork are kept conventionally, they must be housed at each associated place of business indicated explicitly in the registration certificate and should be readily available through each connected place of business where such documents are kept electronically.
An individual who is a subject to an appeal, revision, or other actions before any Appellate Authority, Revisional Authority, Appellate Tribunal, or tribunal, regardless submitted by him or by the Commissioner, or who is now being thoroughly investigated for any type of offence under Chapter XIX, should keep the accounting information as well as other documentation related to the subject matter of such appeal, revisions, processes, or inquiry for one year even after the final disposition of such appeal, revision, proceedings, or investigation.
Every covered entity must present the books of accounts obligated by law to maintain under any applicable legislation upon inspection.
The Commissioner may warn a group of individuals eligible for taxation to preserve supplementary accounts or documentation for the legal purposes indicated in the notification.
If the Commissioner suspects that a particular class of taxable persons seems incapable to keep and manage accounts in compliance with the conditions of the whole section, he may, for possible justifications to be adequately documented, consider allowing such category of taxable persons to stay and maintain accounts in the prescribed manner.
If the citizen is unable to maintain appropriate documentation for goods/services, the proper investigator must evaluate the amount of tax owed on the goods or services or both that are not taken into account, as though such person had provided these goods or services or both, and the terms mentioned in Section 73 or Section 74, as necessarily applicable, shall apply mutatis mutandis for such determination of tax owed essentially.