Sub Section (1) of Section 35 of CGST Act, 2017, Sub Section (6) of Section 35 of CGST Act, 2017 & Section 36 of CGST Act, 2017 read with Rule 56 of CGST Rules, 2017 & Rule 57 of CGST Rules, 2017 governs the provisions for Accounts and other records to be maintained by registered persons, Period of retention of accounts and Generation and maintenance of electronic records.

1. What are the documents required to be maintained by registered person?

As per Sub Section (1) of Section 35 of CGST Act, 2017, registered person shall keep and maintain a true and correct account of-

a) production or manufacture of goods;

b) inward and outward supply of goods or services or both;

c) stock of goods;

d) input tax credit availed;

e) output tax payable and paid; and

f) such other particulars as may be prescribed under rule 56

Accounts and Records

2. At which place, documents required to be maintained by registered person?

As per Sub Section (1) of Section 35 of CGST Act, 2017, every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration.

As per First Proviso to Sub Section (1) of Section 35 of CGST Act, 2017, Provided that 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.

3. For what period accounts shall be retained?

As per Section 36 of CGST Act, 2017, Every registered person required to keep and maintain books of account or other records in accordance with the provisions of sub-section (1) of section 35 shall retain them until the expiry of seventy two months from the due date of furnishing of annual return for the year pertaining to such accounts and records:

Provided that a registered person, who is a party to an appeal or revision or any other proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal or court, whether filed by him or by the Commissioner, or is under investigation for an offence under Chapter XIX, shall retain the books of account and other records pertaining to the subject matter of such appeal or revision or proceedings or investigation for a period of one year after final disposal of such appeal or revision or proceedings or investigation, or for the period specified above, whichever is later.

4. What are the documents required to be maintained by registered person as per Rule 56 of the CGST Rules, 2017?

As per Clause (f) of Sub Section (1) of Section 35 of CGST Act, 2017,

1) Every registered person shall keep and maintain, in addition to the particulars mentioned in sub-section (1) of section 35, a true and correct account of the goods or services imported or exported or 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 and refund vouchers.

2) Every registered person, other than a person paying tax under section 10, shall maintain the accounts of stock in respect of goods received and supplied by him, and such accounts shall 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.

3) Every registered person shall keep and maintain a separate account of advances received, paid and adjustments made thereto.

4) Every registered person, other than a person paying tax under section 10, shall keep and maintain an account, containing the details of tax payable (including tax payable in accordance with the provisions of sub-section (3) and sub-section (4) of section 9), 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.

5) Every registered person shall keep the particulars of—

a) names and complete addresses of suppliers from whom he has received the goods or services chargeable to tax under the Act;

b) names and complete addresses of the persons to whom he has supplied goods or services, where required under the provisions of this Chapter;

c) the complete address of the premises where goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.

6) If any taxable goods are found to be stored at any place(s) other than those declared under sub-rule (5) without the cover of any valid documents, the proper officer shall determine the amount of tax payable on such goods as if such goods have been supplied by the registered person.

7) Every registered person shall keep the books of account at the principal place of business and books of account relating to additional place of business mentioned in his certificate of registration and such books of account shall include any electronic form of data stored on any electronic device.

8) Any entry in registers, accounts and documents shall not be erased, effaced or overwritten, and all incorrect entries, otherwise than those of clerical nature, shall be scored out under attestation and thereafter the correct entry shall be recorded and where the registers and other documents are maintained electronically, a log of every entry edited or deleted shall be maintained.

9) Each volume of books of account maintained manually by the registered person shall be serially numbered.

10) Unless proved otherwise, if any documents, registers, or any books of account 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.

11) Every agent referred to in clause (5) of section 2 shall maintain accounts depicting the,—

a) particulars of authorisation received by him from each principal to receive or supply goods or services on behalf of such principal separately;

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

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

d) details of accounts furnished to every principal; and

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

12) Every registered person manufacturing goods shall maintain monthly production accounts showing quantitative details of raw materials or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by products thereof.

13) Every registered person supplying services shall maintain the accounts showing quantitative details of goods used in the provision of services, details of input services utilised and the services supplied.

14) Every registered person executing works contract shall keep separate accounts for works contract showing—

a) the names and addresses of the persons on whose behalf the works 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 details of payment received in respect of each works contract; and

e) the names and addresses of suppliers from whom he received goods or services.

15) The records under the provisions of this Chapter may be maintained in electronic form and the record so maintained shall be authenticated by means of a digital signature.

16) Accounts maintained by the registered person together with all the invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply shall be preserved for the period as provided in section 36 and shall, where such accounts and documents are maintained manually, be kept at every related place of business mentioned in the certificate of registration and shall be accessible at every related place of business where such accounts and documents are maintained digitally.

17) Any 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 shall maintain true and correct records in respect of such goods handled by him on behalf of such registered person and shall produce the details thereof as and when required by the proper officer.

18) Every registered person shall, on demand, produce the books of accounts which he is required to maintain under any law for the time being in force.

5. What are the responsibilities of person maintaining accounts in electronic form?

As per Rule 57 of CGST Rules, 2017, following are the responsibilities of person maintaining accounts in electronic form:-

(1) Proper electronic back-up of records shall be maintained and preserved in such 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.

(2) The registered person maintaining electronic records shall produce, on demand, the relevant records or documents, duly authenticated by him, in hard copy or in any electronically readable format.

(3) Where the accounts and records are stored electronically by any registered person, he shall, on demand, provide the details of such files, passwords of such files and explanation for codes used, where necessary, for access and any other information which is required for such access along with a sample copy in print form of the information stored in such files.

6. What are the responsibilities of person maintaining accounts in electronic form?

As per Sub Section (1) of Section 36 of CGST Act, 2017, Subject to the provisions of clause (h) of sub-section (5) of section 17, where the registered person fails to account for the goods or services or both in accordance with the provisions of sub-section (1), the proper officer shall determine the amount of tax payable on the goods or services or both that are not accounted for, as if such goods or services or both had been supplied by such person and the provisions of section 73 or section 74, as the case may be, shall, mutatis mutandis, apply for determination of such tax.

Meaning thereby, where the registered person fails to account for the goods or services or both on account of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; the proper officer shall determine the amount of tax payable as if such goods or services or both had been supplied by such person, i.e., outward supplies and the provisions of section 73 or section 74 shall apply for determination of such tax.

7. If registered person is maintaining accounts in electronic form, is it necessary to maintain accounts in hard copy also?

As per Second Proviso to Sub Section (1) of Section 35 of CGST Act, 2017, Rule 57 of CGST Rules, 2017 and by applying rules of Interpretation, every registered person can maintain and keep accounts in electronic form.

But there is a condition to it as per Sub Rule (8) of Rule 56 of CGST Rules, 2017, Any entry in registers, accounts and documents shall not be erased, effaced or overwritten, and all incorrect entries, otherwise than those of clerical nature, shall be scored out under attestation and thereafter the correct entry shall be recorded and where the registers and other documents are maintained electronically, a log of every entry edited or deleted shall be maintained.

Meaning thereby, if the software used by registered person is having a facility to maintain log files, i.e., when any entry is being done or modified or deleted and by whom, then there is no requirement to maintain and keep accounts in hard copy.

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