The implementation of the Goods and Services Tax (GST) in India has significantly transformed the indirect taxation landscape. One crucial aspect that businesses need to adhere to is the maintenance of accurate and complete accounts and records. This is not only a legal requirement but is essential for self-assessment, compliance verification, and overall financial transparency. In this guide, we delve into the specifics of GST record-keeping, covering who is responsible, what needs to be maintained, where, and for how long.

Who Shall Maintain Accounts and Records Under GST?

Two categories of entities bear the responsibility of maintaining specified accounts and records under GST:

Owner or Operator of Warehouses or Godowns: Individuals or businesses operating storage facilities for goods are required to maintain proper records.

Every Transporter: Whether registered under GST or not, every entity involved in the transportation of goods must maintain accounts and records.

What Are The Documents and Records Required?

As outlined in Section 35 of the CGST Act, 2017, registered persons are obligated to maintain true and correct accounts of various aspects of their business. These include:

Production and Manufacture: Details of the production and manufacturing processes for goods.

Purchase and Sale: Comprehensive records of all goods or services bought or sold.

Stock of Goods: Accurate and up-to-date information about the inventory of goods.

Output Tax Payable and Paid: Details of the tax payable and the tax that has been paid.

Input Tax Credit Availed: Information on the input tax credit claimed.

Other Particulars: Any additional particulars as prescribed by GST regulations.

Location of Accounts and Records

According to GST regulations, the books of account should be maintained at the principal place of business and any other place of business mentioned in the registration certificate. If electronic records are used, they should be backed up properly, and digital data must be authenticated. Any deviation from the registered places may lead to presumptions about the maintenance of accounts by the registered person.

Correction in Accounts and Records

Corrections in entries should generally be of clerical nature. If there are other corrections, they should be scored out under attestation, and the correct entry should be recorded. A log of every entry edited or deleted should be maintained when records are stored electronically.

Period of Preservation of Accounts and Records

All accounts and records must be preserved for a period of seventy-two months (six years) from the date of furnishing the annual return for the relevant year. If a person is involved in an appeal or review, the records must be maintained for one year after the final disposal of the proceedings or investigation or for a period of six years, whichever is later.

Electronic Records

For businesses maintaining electronic records, certain requirements must be fulfilled:

Proper electronic backup should be maintained.

Duly authenticated relevant documents should be produced on demand.

Details of files, passwords, and any necessary information for access should be provided on demand.

Account and Records for Specific Entities

Owners or Operators of Godowns or Warehouses: These entities should maintain records of goods stored, showing details of each item and owner-wise storage. These records should facilitate easy physical verification or inspection.

Transporters: Records should include details of goods transported, delivered, and stored in transit. The GSTIN numbers of the registered consigner and consignee for each branch should also be recorded.

Conclusion

GST record-keeping is not just a compliance necessity; it’s a strategic aspect of business management. Accurate and well-maintained records not only ensure compliance with the law but also facilitate smoother business operations and decision-making. In the dynamic landscape of GST, businesses that embrace meticulous record-keeping position themselves for long-term success and financial health. Understanding the nuances of what, where, and how to maintain records is pivotal for businesses aiming to thrive in the GST regime.