Introduction:
Accounts and records shall play a very important role in GST regime due to multiple reasons which could be classified as GST, an accounting based law and ITC of large number of goods and services and both shall be available under GST regime and in order to maximize the credit proper accounting and maintenance of proper records is of paramount importance.
Section 35 and 36 of CGST Act, 2017 deals with Accounts and other records under GST and subsection 2 of section 35 read with rule 58 clause 1 ,1A, 2,3,4(a),4(b),5 deals with records to be maintained by the owner or operator of godown or warehouse and transporter.
Section 35(2) of CGST Act read as :
Every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consignor, consignee and other relevant details of the goods in such manner as may be prescribed.
Applicability of the following section on following persons:
1. Transporter and
2. Owner or operator of godown or warehouse or any other place used for storage of goods.
Above persons, shall maintain records of consignor or consignee and other relevant details of the goods in the manner provided in Rule 58. However, It is immaterial whether the following persons as mentioned above are registered or not and thus it is to be noted that the following rule is applicable for unregistered operator of godown and transporter.
Rule 58 is further categorized under sub-rules which are as follows:
Rule-58(1) : Communication of a unique enrolment number upon validation of the details furnished.
Every person required to maintain records and accounts as per the provisions of section 35(2),if not registered under the said act than shall submit the business details in GST ENR-01 and upon validation of details furnished, a unique enrolment number shall be generated and communicated to the said person.
Rule-58(1A) : Unique common enrolment number to the transporter registered in more than one state or UT ( Inserted vide notification no. 28/2018 dated 19.06.2018).
A transporter who is registered in more than one State or Union territory having the same PAN number, for generation e-way bills may apply for unique enrolment number by submitting the details in Form GST ENR-02 using any one of his GSTIN and upon validation of details furnished, a unique enrolment number shall be generated and communicated to the said person.
However, where the said transporter has obtained a unique common enrolment number ,he shall not be eligible to use any of the GSTN for the purpose of issuing E-way bills.
Rule 58(2) : Deemed Enrolment
Person enrolled under rule 58(1) in any other state or Union territory shall be deemed to be enrolled in the same state or Union Territory.
Rule 58(3) : Amendment in the details furnished while filing GST ENR-01.
Every person who is enrolled under sub-rule (1) shall, where required, amend the details furnished in Form GST ENR-01 electronically on the common portal either directly or through a Facilitation Centre notified by the Commissioner.
Rule 58(4)(a) : Maintenance of records by person engaged in the business of transporting goods
Any person (not registered person) engaged in the business of transporting goods shall maintain records of goods transported, delivered and goods stored in transit by him along with GSTIN of the registered consigner and consignee for each of his branches.
Rule 58(4)(b) : Maintenance of records by every owner or operator of a warehouse or godown
Every owner or operator of a warehouse or godown (whether registered or not) shall maintain books of accounts, with respect to the period for which particular goods remain in the warehouse, including the particulars relating to dispatch, movement, receipt and disposal of such goods.
Rule 58(5) : Manner of storing the goods by the owner or the operator of the godown
The owner or the operator of the godown shall store the goods in such manner that they can be identified item-wise and owner-wise and shall facilitate any physical verification or inspection by the proper officer on demand.
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.
Conclusion: The provisions within the CGST Act, 2017, specifically Sections 35 and 36, alongside Rule 58, establish a clear mandate for the maintenance of detailed records by transporters, warehouse operators, and owners of storage facilities. These requirements serve a dual purpose: ensuring compliance with the GST framework and enabling businesses to fully leverage the ITC mechanism, thereby optimizing their tax liabilities. The legislation underscores the criticality of systematic record-keeping in the GST era, where accurate and comprehensive documentation forms the backbone of tax compliance and financial prudence. Businesses must heed these regulations diligently to navigate the GST regime successfully, avoiding the adverse consequences of non-compliance, including tax liabilities and penalties. The emphasis on record-keeping not only facilitates tax administration but also enhances the overall transparency and efficiency of the tax system, benefiting both businesses and the economy at large.
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