This article discusses the accounts and records under GST that are required to be maintained by the taxpayer, retention period and such other obligations that are required to have complied in respect of accounts and records.
The Assessment under GST is mainly focused on the self-assessment by the taxpayer where the taxpayer self-assesses his tax liability for the tax period by himself and pays the same. For the sake of compliance verification, scrutiny, audit and or investigation are done by the department based on the documentary checks rather than physical records. This led to frame a certain obligation to be complied with by the taxpayer for the purpose of keeping and maintaining accounts and records.
Who are required to maintain Accounts and Records?
Every person registered under the GST act is required to keep and maintain all records at his principal place of business.
It is the responsibility of the following a person to maintain certain records
- The operator of the warehouse or godown or any other place where goods are stored.
- Every Transporter
irrespective of the fact whether he is a registered person or not, He shall maintain records of the consignor, consignee, and other relevant facts or goods in such manner as may be prescribed.
Every Registered Person having a turnover exceeding Rs.2 Crore during the financial year has to get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of audited annual accounts, the reconciliation statement and such other documents as may be prescribed.
Records to be maintained under GST
As per section 35 of CGST act, every Registered person shall keep and maintain the following records
- Production or manufacture of goods
- Supply of goods or services or both
- Stock of goods
- Input tax credit availed
- Output tax payable and paid and
- Such other particulars as may be prescribed.
In addition to the above, every registered person shall keep and maintain records of
- Goods or services imported or exported
- Supplies on which reverse charge mechanism applies
- invoices, bills of supply, delivery challans, credit notes, debit notes, receipt, vouchers, payment vouchers, refund vouchers, and e-way bills and such other documents that are relevant to the above.
Accounts to be maintained under GST
Following accounts are required to be maintained by Every registered person
- Stock register account containing information’s with respect to stock opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples and balance of stock which includes raw materials, finished goods, scrap, and wastage thereof
- Tax accounts containing details of output tax payable, Input tax credit, etc.,
- Supplier accounts from whom taxable goods or services purchased
- Debtor accounts to whom taxable goods or services supplied
- And such other records as may be specified under the act
Electronic Cash and Credit Ledger
Every registered person is required to maintain 3 ledgers under GST which will be auto-generated at the time of registration and will be maintained electronically.
- Electronic Cash Ledger- Electronic Cash ledger is like an e-wallet where the taxpayer deposits money into his cash ledger (adding money to the wallet). The money shall be utilized for the purpose of making the payment.
- Electronic Credit Ledger- Electronic Credit Ledger is a place where input tax credit on purchases will get reflected under three categories such as IGST, CGST & SGST. The taxpayer can utilize such Input tax credit for the payment of output tax but not for the purpose of interest and penalty payments.
- Electronic Liability Ledger: Electronic Credit ledger is an auto-populated ledger showing the details of the total tax liability of a taxpayer after netting off for the particular month.
Retention Period of Accounts under GST
As per section 36 of the CGST Act, every registered person is required to keep and maintain the account books and records for the period of at least 6 years from the due date of furnishing an annual return for the year pertaining to such accounts and records.
In case the taxpayer is a party to an appeal or revision or any other proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal or court or is under investigation, then such taxpayer is required to retain the books of account and other records pertaining such proceedings for a period of 1 year after final disposal of such investigation or proceedings or appeal, or for the period specified above, whichever is later.
Consequences of Not Maintaining Proper Records
In case of failure to maintain proper records in respect of goods or services, then the proper officer shall determine the tax payable on such unaccounted goods or services by assuming that the unaccounted goods or services have been supplied by such person and proceedings of section 73 or 74 shall mutatis mutandis apply for a determination of tax. Section 35(6) of the CGST Act.