maintaining accounts under gst

Accounts to be Maintained under Goods and Services Tax Law

Last Update Date : August 13, 2018

maintaining accounts under gst

According to section 35 of the Act, every registered person is obligatory to keep and maintain books of account at his principal place of business, as mentioned in the certificate of registration.

Accounts Information to be furnished therein
Account/Records to be maintained by Assessee that carry out manufacturing activities
Register of Goods Produced Details of goods manufactured in a factory or production house
Account/Records to be maintained by all Assessee
Purchase Register All the purchases made within a tax period for manufacturing of goods or provision of services
Sales Register All the sales made within a tax period must be maintained
Stock Register A correct stock of inventory available at any given point of time
Input Tax Credit Availed The details of Input Tax Credit availed for a given tax period
Output Tax Liability The details of GST liability outstanding to be adjusted against input credit or paid out directly
Output Tax Paid The details of GST paid for a particular tax period
Account/Records to be maintained by Specific Businesses as notified by the government
Other Records Specified Government can further specify by way of a notification, additional records and accounts to be maintained

Note:

  • In case of more than one place of business, the accounts pertaining to each place of business shall be kept at such places of business concerned (provided such place is specified in the certificate of registration).
  • Accounts can be maintained in electronic form.
  • Final accounts of every registered person whose turnover during a financial year exceeds the prescribed limit of INR 2 crore should get audited by a chartered accountant or a cost accountant and submitted along with reconciliation form as per section 44 (2).

Mandatory Books to be Maintained by a Registered Taxable Person

As per Section 35 of the Act, read with Draft Accounts and Records Rules, a registered taxable person needs to maintain the following mandatory books of on a true and correct basis:

  • Stock of goods
  • Production or manufacture of goods
  • Inward/Outward supply of Goods/Services
  • Input tax credit availed
  • Output tax payable and paid

Additional Accounts other than Mandatory Books

Apart from mandatory books, a registered taxpayer also need to maintain below mentioned Additional Accounts

  • Names and address of suppliers and receivers of goods/services
  • Complete address of locations where goods are stored
  • Accounts of stock for each commodity received or supplied
  • Goods/services exported or imported
  • Supplies involving reverse charge along with proper documents
  • Tax payable on RCM
  • Advances received, paid and adjusted
  • Tax payable, tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit note, debit note, delivery challan issued or received during any tax period;

Accounts to be Maintained by Registered Taxable Person Providing Works Contract Service

According to Rule 1(15) of Accounts and Records Rules, 2017 the registered taxable person who provides works contract service shall maintain the accounts showing:

  • the names and addresses of the persons on whose behalf the works contract is executed;
  • the names and addresses of suppliers from whom a taxable person has received goods or services;
  • description, amount, and quantity (if applicable) of goods / services procured for the execution of works contract;
  • description, amount, and quantity(if applicable) of goods / services utilized in the execution of each works contract;
  • Payments received in respect of each works contract

Accounts to be Maintained by Every Agent

Every agent as per the GST is required to maintain the following accounts:

  • Details of authorization received by him from every principal separately relating to supply or receive goods/services on behalf of principal
  • Details description, amount and quantity of goods/services received or supplied
  • Details of account furnished to every principle
  • Tax paid on supply or receipt of goods/services on behalf of every principle

Accounts to be Maintained by Every Owner or Operator of Warehouses or Godowns

Every owner/operator of warehouse or godowns or any other place used for storage of goods and transporter (whether registered or not) needs to maintain records of consigner, consignee and other relevant details as under:

For transporter

  • Goods transported
  • Goods delivered
  • Goods stored in transit by him or branches

For owners/operators of godowns/warehouses

  • Accounts related to that period for which goods remain with him
  • Details of dispatch, movement, receipt and disposal

Owner/operator of warehouse or godowns or any other place used for storage of goods and transporter if not registered is required to submit the details regarding his business electronically on the Common Portal in FORM GST ENR-01, either directly or through a Facilitation Centre notified by the Commissioner.

Place The books of account are to be maintained at principal place of business as mentioned in the certificate of registration.
In case of additional places of business, the accounts relating to each place of business shall be kept at such places of business concerned.
Exception In case any persons is not in a position to keep and maintain accounts in accordance with the provisions of this section, the Commissioner/ Chief Commissioner may permit such persons to maintain accounts in such manner as may be prescribed after recording the reasons for the same.
Time limit – Every registered person required to maintain books of accounts has to retain such accounts until the expiry of 72 months from the date of filing of annual returns for the year pertaining to such accounts and records.

Maintenance of Accounts by Registered Persons (RP)

a) TRUE AND CORRECT accounts of the goods or services supplied or imported or exported or supplies attract tax on reverse charge along with relevant documents like:

  • Invoices
  • Bills of supply
  • Delivery Challans
  • Credit/Debit Notes
  • Receipt Vouchers
  • Payment Vouchers
  • Refund Vouchers
  • E-way Bills (Shall be maintained separately for each activity like manufacturing, trading and services)

b) With regard to stock (For each commodity):- ( except person paying tax U/s 10 ; opted composition scheme)

  • Opening balance
  • Receipts
  • Supply
  • Goods lost/ stolen/destroyed/ written off/disposed
  • Disposed by way of gift/free samples
  • Closing balance (shall be maintained for raw material, finished goods, scrap, wastage etc,)

c) With regards to advances:

  • Advance received
  • Advance Paid
  • Advance Adjustments

d) Each RP ( except person paying tax U/s 10 ; opted composition scheme) shall maintain details of tax payable, tax collected, paid, input tax credit claimed along with others.

e) Every RP shall keep the name and complete address of

  • Suppliers from whom he has received goods/services
  • Suppliers to whom he has supplied goods/services
  • Premises/goods in transit where goods stored by him.

f) Any taxable goods are found to be stored in any other place (other than the registered premises) without any valid documents the Proper officer shall determine the tax payable on such goods as if such goods have been supplied by the RP.

g) Every RP shall keep the books of accounts (both in paper and electronic form) at the Principal Place of business and at other places as mentioned in his certificate of registration.

h) Any entry in registers, accounts and documents shall not be erased, effaced or overwritten and all incorrect entries shall be scored with proper attestation after recording correct entry. In case of electronic accounts a log of every entry edited/deleted to be maintained.

i) Each volume of books of accounts shall be serially numbered.

j) Any documents, registers or books of accounts belonging to a RP found at any other premises (not mentioned in registration certificate) shall be presumed to be maintained by the said RP.

k) Every Agent shall maintain the following:

  • Particular of authorization from each principal separately.
  • Particulars (Description, Value & Quantity) of Goods/services received on behalf of every principal.
  • Particulars (Description, Value & Quantity) of Goods/services Supplied on behalf of every principal.
  • Details of accounts furnished to every principal.
  • Tax paid on receipts/supply of Goods/services effected on behalf of every principal.

l) Every RP shall maintain the Monthly production/accounts showing quantitative details of raw materials/input services used in manufacture/provision of services and details of finished goods/services, waste and by-products thereof.

m) Every RP executing works contracts shall keep separate acconts for each work contract showing;

  • The name and address of person on whose behalf the work is executed.
  • Description, value and quantity of goods/services received or utilized in the execution of each work contract.
  • The details of payment received for each work contract.
  • The name and address of suppliers from whom he has received goods/services.

n) In case of records maintained in electronic form the same shall be authenticated by means of a digital signature.

o) All the books of accounts shall be preserved for a period as mentioned U/s 36 and produce on demand.

p) Any person like carrier, custodian or clearing & forwarding agent shall maintain true and correct records in respect of goods handled by them on behalf of registered persons and shall produce as and when required by the proper officer.

Generation and Maintenance of Electronic Records

  • Proper back up with restoration time of reasonable period.
  • On demand produce the records with duly authentication (the hard copy or electronic readable format).
  • On demand should produce audit trail, inter linkage source documents financial accounts, record lay out, data dictionary and explanation of codes used etc.

Records to be maintained by Owner/Operator of Godown/ Warehouse/Transporters

  • Every person required to maintain records U/s 35(2) if not already registered shall submit details regarding his business in Common portal in FORM GST ENR-01, after validation of the same a unique enrollment number shall be generated and communicated to the said person.
  • The person enrolled as above in any other state or UT shall be deemed to be enrolled in the state or UT.
  • The FORM GST ENR-01 may be amended where required.
  • Transporter of goods shall maintain records of goods transported, delivered and goods stored in transit by him for each of his branches.
  • Every owner/Operator of a warehouse or godown shall maintain books of accounts in respect of goods remained in warehouse i.e dispatch, movement, receipt and disposal of such goods.
  • Every owner/Operator of a warehouse or godown shall store the goods in such manner that they can be identified item wise and owner wise and shall facilitate any physical verification/inspection by the proper officer on demand.

Period of Retention of Accounts under GST

Every registered taxable person under GST must maintain the books of accounts for at least 72 months (i.e. 6 Months). The period is calculated from the date of filing of the last Annual Return. And as per the provisions of chapter XIX, if a taxpayer is a part of any legal proceedings or investigation he must maintain the books of accounts for 1 year after the order of such appeal has been passed, or the period mentioned above whichever is later.

Consequences of Not Maintaining Proper Records

If a taxable person, required to maintain the books of accounts under GST, fails to do so shall attract a penalty. Also, the goods/services will be treated as the unaccounted goods/services supplied by the taxpayer and liability will be calculated accordingly by the assessing officer on such unaccounted goods/services and the taxpayer must pay the tax liability thus calculated along with the penalty.

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