Accounts and Other Records to be maintained under GST

Every registered person under GST is required to keep and maintain all specified Accounts and records at his principal place of business.

Who must maintain Accounts and Other Records under GST?

Section 35 of the CGST Act, 2017 has cast the responsibility on the owner or operator of warehouse or godown or any other place used for storage of goods and on every transporter to maintain specified records.
Audit of Accounts Maintained under GST

Every registered person whose turnover during a financial year exceeds the prescribed limit (2 crore) will get his accounts audited by a chartered accountant or a cost accountant.

What Books of Accounts or records must be maintained under GST?

Every registered person must maintain records of-

  • Production or manufacture of goods
  • Inward and outward supply of goods or services or both (Purchase and Sales Register)
  • Stock of goods (Inventory Register)
  • Input tax credit availed (Electronic Credit Ledger)
  • Output tax payable and paid and (Electronic Liability and Electronic Cash Ledger)
  • Other particulars as may be prescribed
  • Records of goods or services imported or exported or
  • Records of supplies attracting payment of tax on reverse charge along with the relevant documents, including invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills.
Records Information Required By Whom?
Register of Goods Produced Account should contain detail of goods manufactured in a factory or production house Every Assessee carrying out manufacturing activity
Purchase Register All the purchases made within a tax period for manufacturing of goods or provision of services All Assessee
Sales Register Account of all the sales made within a tax period must be maintained All Assessee
Stock Register This register should contain a correct stock of inventory available at any given point of time All Assessee
Input Tax Credit Availed This register should maintain the details of Input Tax Credit availed for a given tax period All Assessee
Output Tax Liability  This register should maintain the details of GST liability outstanding to be adjusted against input credit or paid out directly All Assessee
Output Tax Paid This register should maintain the details of GST paid for a particular tax period All Assessee
Other Records Specified Government can further specify by way of a notification, additional records and accounts to be maintained Specific Businesses as notified by the government

Electronic Cash and Credit Ledger

Every registered taxpayer will have 3 ledgers under GST which will be generated automatically at the time of registration and will be maintained electronically.

Electronic Cash Ledger– This ledger will serve as an electronic wallet.  The taxpayer will have to deposit money into his cash ledger (add money to the wallet). The money will be utilized to make the payment. A taxpayer can view their Electronic Cash Ledger by logging on to the GST website. Electronic Cash Ledger can only be viewed by the taxpayers themselves or by their Jurisdictional Officer (JO).

The amount available in the Electronic Cash Ledger can be utilised for payment of any liability for the respective major and minor heads. For example, liability for the tax under SGST can be utilised from the available amount of cash available under SGST only.

Electronic Credit Ledger– The input tax credit on purchases will be reflected here under three categories i.e IGST, CGST & SGST. The taxpayer will be able to utilize the balance shown in this account only for payment of tax (not for interest, penalty etc.)

The Electronic Credit Ledger is maintained by the GST System. Taxpayers can view their Electronic Credit Ledger in the post login mode by logging on to the GST Portal. Path: Services > Ledgers > Electronic Credit Ledger. An Electronic Credit Ledger can be viewed only by the taxpayers themselves or by the concerned Jurisdictional Officer (JO).

E-Liability Ledger: This ledger will show the total tax liability of a taxpayer after netting off for the month. This ledger will be auto-populated.

Period for Retention of Accounts under GST

As per the GST Act, every registered taxable person must maintain the accounts books and records for at least 72 months (6 years). The period will be counted from the last date of filing of Annual Return for that year.

Such accounts and records and shall be kept at every related place of business mentioned in the certificate of registration.

The last date of filing the Annual return is 31st December of the following year.

For example:

For the year 2017-2018, the due date of filing the annual return is 31.12.2018. The books & records of 2017-2018 must be maintained for 6 years, i.e., 31.12.2023

If the taxpayer is a part of any proceedings before any authority (First Appellate) or is under investigation, then he must maintain the books for 1 year after the order of such proceedings/appeal has been passed.

Consequences of Not Maintaining Proper Records under GST

If the taxpayer fails to maintain proper records in respect of goods/services, then the proper officer shall treat such unaccounted goods/services as if the taxpayer had supplied them. The officer will determine the tax liability on such unaccounted goods.

The taxable person will be required to pay the tax liability calculated along with penalty.

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice. Neither the authors accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.

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