Under the Goods and Services Tax (GST) Act of 2017, registered persons are required to maintain specific accounts and records for a certain period. These records are crucial for ensuring compliance with the GST law and for facilitating tax audits.

Here’s a summary of the key accounts and other records required under the GST Act 2017:

1. Sales and purchase registers: These registers should record all outward and inward supplies of goods and services, including the date, invoice number, value of supply, tax rate, and tax amount.
2. Credit and debit notes registers: These registers should record any adjustments made to sales or purchases, such as returns, refunds, or cancellations.
3. Stock register: This register should track the opening and closing stock of goods at the end of each accounting period under GST Act 2017.
4. Ledger accounts: These accounts should record the financial transactions of the business, including sales, purchases, expenses, and income.
5. Cash book: This book should record all cash receipts and payments made by the business.
6. Bank statements: Copies of bank statements should be kept for reference.
7. Tax invoices: All invoices issued for taxable supplies must comply with the GST invoice format and must be retained for the prescribed period under GST Act 2017.
8. Payment vouchers: Copies of all payment vouchers, such as cheques and receipts, should be kept for reference.
9. Delivery challans: Copies of delivery challans should be kept as proof of delivery of goods.
10. Goods receipt notes: Copies of goods receipt notes should be kept as proof of receipt of goods.
11. Import and export documents: If the business imports or exports goods, copies of all relevant documents such as bills of lading, customs declarations, and invoices must be kept.
12. Correspondence related to GST: Any correspondence with the tax authorities regarding GST should be kept for reference.
13. Digital records: Records can also be maintained in electronic form, as per the prescribed rules. These records must be authenticated by means of a digital signature GST Act 2017.

The specific requirements for maintaining accounts and records may vary depending on the nature and size of the business. However, all registered persons must ensure that they keep accurate and complete records for the prescribed period, which is generally six years from the date of filing the annual return GST Act 2017.

Here are some additional points to keep in mind:

• The records should be maintained in a systematic and orderly manner.
• The records should be readily accessible to the tax authorities for inspection.
• The records should be preserved in a safe place to avoid loss or damage.

Failure to maintain proper accounts and records can lead to penalties under the GST Act. 2017 Therefore, it is important for businesses to comply with the record-keeping requirements.

EXAMPLE

• Bank accounts: When you open a bank account in India, you need to provide your proof of address, which typically includes your state. So, all bank accounts in India have a state associated with them.
• Voter ID cards: Voter ID cards are issued by the Election Commission of India and they include the voter’s state of residence.
• Driving licenses :Driving licenses are issued by the regional transport authorities of each state in India, so they include the driver’s state of residence GST Act. 2017.
• Property records :Property records, such as land titles and deeds, are maintained by the state governments in India. So, all property records in India have a state associated with them.
• Company registration records: Companies registered in India are required to file their registration documents with the Registrar of Companies for their state. So, all company registration records in India have a state associated with them GST Act. 2017.

FAQ QUESTION

Q: Who is required to maintain accounts and records under GST?

A: Every registered person under GST Act 2017must maintain accounts and records. This includes businesses, individuals, and other entities exceeding the prescribed turnover limit (currently ₹40 lakhs for goods and ₹20 lakhs for services).

Q: What records need to be maintained?

A: Registered persons must maintain records of:

• Production or manufacture of goods
• Inward and outward supply of goods or services
• Stock of goods
• Input tax credit availed
• Output tax payable and paid
• Other particulars as may be prescribed (e.g., invoices, bills of supply, credit and debit notes, delivery challans)

Q: Where should these records be kept?

A: The records should be kept at the principal place of business mentioned in the certificate of registration. Additional records may be kept at other places of business, but they must be clearly linked to the principal place GST Act. 2017.

Q: For how long should records be retained?

A: Records must be retained for at least 72 months (6 years) from the last date of filing the annual return for that year. This period may be extended if there are any proceedings or investigations pending used in GST Act. 2017.

Q: Can records be maintained in electronic form?

A: Yes, records can be maintained in electronic form with a digital signature. However, certain documents, such as invoices and bills of supply, must also be available in physical form under GST Act. 2017.

Q: What are the consequences of not maintaining proper records?

A: Failure to maintain proper records can lead to penalties, including fines and interest. In serious cases, it may also lead to prosecution under GST Act. 2017.

CASE LAWS

• M/s. Jindal Stainless Ltd. v. Union of India & Ors. (2019) 14 SCC 500: This case dealt with the question of whether the Central Board of Indirect Taxes and Customs (CBIC) has the power to issue circulars or notifications which are not in conformity with the provisions of the GST Act 2017. The Supreme Court held that the CBIC cannot issue circulars or notifications which are in contravention of the provisions of the Act. This case is relevant because it highlights the importance of maintaining records in accordance with the provisions of the Act and the rules made thereunder.
• M/s. Steel Strips Pvt. Ltd. v. Union of India (2017) 19 GST 181 (SC): This case dealt with the question of whether the levy of IGST on intra-State supply of goods is unconstitutional. The Supreme Court held that the levy of IGST on intra-State supply of goods is unconstitutional. This case is relevant because it suggests that the government may not have the power to mandate certain record-keeping requirements for intra-State supplies GST Act 2017.
• Union of India v. M/s. Vapi Industries Ltd. (2018) 10 GST 1104 (SC): This case dealt with the question of whether the levy of GST on supply of goods to SEZ units is unconstitutional. The Supreme Court held that the levy of GST Act 2017 on supply of goods to SEZ units is not unconstitutional. This case is relevant because it suggests that the government may have the power to mandate certain record-keeping requirements for supplies to SEZ units.

In addition to these cases, there are also a number of circulars and notifications issued by the CBIC which deal with the maintenance of accounts and other records under the GST Act 2017. These circulars and notifications can be found on the website of the CBIC.

Here are some of the key provisions of the GST Act 2017 and the rules made there under which deal with the maintenance of accounts and other records:

• Section 35 of the GST Act 2017:This section requires every registered person to keep and maintain such accounts and records as may be prescribed by the rules.
• CGST Rules, 2017:Chapter 7 of the CGST Rules deals with the maintenance of accounts and records. Some of the key provisions of this chapter include:
  • Every registered person must maintain a true and correct account of the goods or services imported or exported or of supplies attracting payment of tax on reverse charge.
  • Every registered person must maintain records of inward and outward supply of goods or services or both GST Act 2017.
  • Every registered person must maintain a stock register of goods.
  • Every registered person must maintain records of input tax credit availed.
  • Every registered person must maintain records of output tax payable and paid.
  • Every registered person must retain the accounts and records for a period of at least seven years from the due date of furnishing of the annual return GST Act 2017.