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The Maintenance of “Accounts and Records” under GST

In my first article, I dealt with the topic “Transitional Provision and Input Tax Credit” before the implementation of GST from 01.07.2017.  I hope the article has assisted you to overcome the difficulties in filling GST TRAN 1& 2. The time period of filling Form GST TRAN 1 & 2 is 90 days from the appointed date, which enables you to carry forward the eligible input tax credit which had suffered incidence of tax under earlier regime and the same is still available with you either as input, semi-finished or finished goods.

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The next challenge before you after implementation of GST is maintenance of proper accounts and records under the Act. It is pertinent to mention that, without proper maintenance of accounts and records, the taxable person may find several difficulties in filling periodical returns under the Act. Moreover, non-compliance on the part of registered person may eventually result in demand notice.

The maintenance of “Accounts and Records” is specifically covered under Chapter VIII, Section 35 & 36 of CGST ACT,2017 and Rule 56 to 58 of CGST Rules,2017 made there under. With our sincere efforts, we tried to tabulate the respective Sections and Rules in a sequential manner for proper understanding of requirements and better compliance under the provisions of GST.

 ACCOUNTS & RECORDS IN GST

SR. NO

SECTION/RULES

ISSUE

REQUIREMENTS

1

Sec. 35(1) / Rule 56(7) & 56(16)

Place where records are to be kept.

Principal place of business as mentioned in the registration certificate. Further records relating to additional place of business are to be maintained at such place.

2

Sec. 35(1) / Rule 56(7)

Manner of maintenance of records.

Either Manual or Electronic.

3

Sec 35 (1)

Which records are to be maintained.

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

4

Sec. 35(2) / Rule 58(1)

Who is required to keep records.

  1. Registered person
  2. Owner or operator of warehouse or godwon.
  3. Every transporter whether registered or not.

5          

Sec. 35(5)

Audit Report

Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed

6          

Sec.36

Period of Records to be maintained.

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

7          

Rule 56 (1)

Records to be maintained.

  1. Account of goods or services imported or exported
  2. Account of supplies attracting payment of tax on reverse charges along with relevant document, including invoices, bills of supply, delivery challans, Credit notes, debit notes, receipt voucher, payment voucher & refund voucher.

8

Rule 56(2)

Stock Account

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.

9

Rule 56 (3)

Advances

Details of advances received, paid and adjustments made thereto.

10

Rule 56(4)

 Details of Tax

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.

11

Rule 56(5)

Details of supplier/recipient of goods/services

(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.

12

Rule 56(5)

 Details of Place of Storage

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.

13

Rule 56(8)

Whether record of can be erased or modified.

Except clerical errors, any modification or deletion shall be attested in case of manual records and log of every entry edited or deleted in case of electronic records.

14

Rule 56 (9)

  Obligation in case of  Manual records

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

15

Rule 56(11)

 

Which documents are to be maintained by agents supplying goods/services

  1. Particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately.
  2. Particulars including description, value and quantity (wherever applicable) of goods or services received on behalf of every principal;
  3. Particulars including description, value and quantity (wherever applicable) of goods or services supplied on behalf of every principal;
  4. Details of accounts furnished to every principal; and
  5. Tax paid on receipts or on supply of goods or services effected on behalf of every principal.

16

Rule 56(12)

Manufacturers

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.

17

Rule 56 (13)

Services provider.

Quantitative details of goods used in the provision of services, details of input services utilized and the services supplied.

18

Rule 56(14)

Works contractor.

  1. The names and addresses of the persons on whose behalf the works contact is executed;
  2. Description, value and quantity (wherever applicable) of goods or services received for the execution of works contracts;
  3. Description, value and quantity (wherever applicable) of goods or services utilized in the  execution of works contracts;
  4. The details of payment received in respect of each works contract; and
  5. The names and addresses of suppliers from whom he received goods or services.

19

Rule 56 (15)

Electronic Records

Electronic record maintained shall be authenticated by means of a digital signature

20

Rule 57(1)

Whether I have to keep back-up of electronic records.

Proper electronics back-up to be maintained so that in the event of destruction of such records due to accidents or natural causes, the information can be restored within reasonable period of time.

21

Rule 58 (1)

Whether Owner of Godown & transporter require enrolment in GST.

Yes, by filing form GST ENR-01

 

 

22

Rule 58 (4)

Manner of maintenance of records by transporter/ Warehouse keeper.

(a) any person engaged in the business of transporting goods shall maintain records of goods transported, delivered and goods stored in transit by him along with the Goods and Services Tax Identification Number of the registered consigner and consignee for each of his branches.

(b) every owner or operator of a warehouse or godown 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.

24

Accounts/Ledgers

How many ledgers are to be maintained for tax payment.

The following Ledgers are required:

  1. Liability ledger (reflecting liability on outward supply as well as tax payment under reverse charge) – Separately for CGST,SGST & IGST
  2. Credit Ledger (reflecting tax credits claimed) – Separately for CGST, SGST & IGST
  3. Cash Ledger (reflecting payments made and debited against liability) - Separately for CGST, SGST & IGST

25

Accounts/Ledgers

 Whether State-wise accounts are required.

Yes, because as per GST Law, registration in each State is deemed as distinct person and returns are to be filed separately. Even reconciliation statement needs be filed State-wise.

26

Accounts/Ledgers

How to create ledgers for payments under reverse charge.

There are two kinds of reverse charge under GST ;

  1. Specified List:  GST Council has come out with a specific list of supplies which shall attract reverse charge. Hence expense ledgers for each supply specified to be maintained separately.
  2. Receipt from unregistered suppliers: As per GST Law, a registered person has to pay GST under reverse charge in respect to taxable supply of goods/services received from unregistered persons if the value of supply  per day is more than Rs. 5000/-. Hence two sub-ledgers are to be maintained – one covering supplies not liable to tax (which does not attract GST including supply up to Rs. 5,000/-) and second covering supplies liable to tax, on which GST is payable under RCM.

27

Accounts/Ledgers

Reversal of Input tax credits on account of non-payment within 180 days to supplier.

A separate ledger is required to be created in cases where ITC are to be reversed on account of non-payment to suppliers within 180 days. On payment of same, re-credit needs to be taken.

 

 

Disclaimer:  Every effort is being taken to present the article in its true prospective on the basis of the understanding of law by the writer. However in case of any misinterpretation of the fact, the writer should not be held responsible.

                                                            

Authored By

ANJAN CHANDA

Mob: 9821234671,9969658474.

GST Missed Call No.
80809 45075

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