GST Records Maintenance
GST Records Maintenance
Under the GST regime, businesses are required to maintain various accounts and records for ready verification by an authorised GST Authority either in electronic or physical format. The taxable persons are allowed to maintain records in electronic form authenticated by a digital signature. Accounts maintained by a taxable person under GST together with all invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply should be maintained for a period of 6 years from the date of furnishing GST annual return. Further, GST accounts and records must be kept at every related place of business mentioned in the certificate of registration. In this article, we look at GST records maintenance in detail, especially the procedure for maintaining records electronically along with the details of records to be submitted.
Place of Maintenance
The details above must be maintained at the registered office premises or at a branch, where the particular business is being pursued. In case of electronic records maintained on a server, the server must be located in India. If the taxpayer maintains all the details electronically, then the person should use the digital signature as a way of authentication for security measures.
In case of any taxable goods are found to be stored in any other place other than the specified place, the proper officer would impose the tax on such goods have been supplied by the registered person.
Place of Business
Under GST, the “place of business” is defined as:
- A place from where the business is ordinarily carried on and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
- A place where a taxable person maintains his books of account; or
- A place where a taxable person is engaged in business through an agent, by whatever name called;
Under GST, all registered taxpayers must maintain certain documents at their place of business.
Maintenance of Records
The taxpayer can maintain the above records in electronic format or physical format. Electronic record means data, information or inputs that are stored, received and operated in electronic mode. These records would be treated just like physical records, and the auditor seeks the accuracy and truth worthiness of the record. It is to be noted that proper electronic back-up of records must be maintained. Very importantly, the record must be secured in a non-editable format.
Details of Records to be Maintained
According to Section 35 of the GST Act, all taxable persons under GST are required to maintain the following records at their principal place of business:
- Details of production or manufacture of goods;
- Details of inward and outward supply of goods or services or both;
- Stock of goods;
- Input tax credit availed;
- Output tax payable and paid;
- Any other particulars as prescribed:
In case of more than one place of business, then the taxpayer shall keep all the accounts relating to each of the places of business. In addition, the taxpayer may maintain the Accounts and records under GST in both electronic or book format.
More Details on Records
In addition to the regulations mentioned in the GST Act, there is an additional requirement for maintaining accounts and records has been provided for in the GST Accounts and Records Rules. According to the GST Accounts and Records Maintenance Rules, all taxable persons registered under GST should maintain the following accounts in addition to the records mentioned above.
- True and correct account of the goods or services imported or exported or of supplies attracting payment of tax on reverse charge along with relevant documents, including invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills.
- Accounts of stock in respect of goods received and supplied by the taxpayer, and such account shall contain particulars of opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample and balance of stock including raw material, finished goods, scrap and wastage thereof.
- Maintain an account, containing the details of tax payable (including tax payable, tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit note, debit notes, delivery challan issued or received during any tax period.
- Maintain details of Suppliers with information including names and complete addresses of suppliers from whom he has received the goods or services chargeable to tax under GST;
- Maintain details of Customers with information including names and complete addresses of the persons to whom he has supplied goods or services, where required under GST;
- Complete address of the premises where the taxpayer stored the goods, including goods stored during transit along with the particulars of the stock stored therein.
According to the GST Accounts and Records Rules, if the Officer finds any taxable goods stored at any place(s) other than those declared by the taxpayer in his/her accounts or records, without any other proof of valid documents; then, the Officer can authorize to levy tax, as if such goods have been supplied by the registered person. Hence, it is important to maintain a proper record of inventory and goods-in-transit under GST.
How to Maintain GST Accounts?
The taxpayer should maintain all the GST accounts and records, including the books of account, at the principal place of business along with records relating to additional place of business.
The concerned person maintaining GST records manually shall use serial numbers for each of the volumes of books of account. While maintaining GST account manually, if the concerned person should at any point erase, efface or overwrite any entry in any of the registers or accounts or documents, the person shall authorize it only after receiving attestation. After making the required corrections, the person shall enter the correct entry, henceforth. If the person maintains the GST accounts electronically, then the person should maintain a log for severy entry edited or deleted. Also, if GST accounts and records are maintained electronically, then the records should be authenticated using a digital signature and should be accessible from every related place of business mentioned on the GST registration certificate.
Finally, any documents, registers, or any books of account belonging to a registered person found at any premises of the place of business, then it shall apply as, the documents belong to the taxpayer, unless proved otherwise. Hence, it is important to ensure that all accounting and financial information is maintained safely by the taxpayer.
Duty of a Registered Person
All taxable persons are required to produce relevant documents or information on demand in hard copy or electronic form when requested by a tax officer. The taxpayer shall, however, provide the data after receiving an authentication by an authorized person on demand.
Correction in the Records
No person shall erase or overwrite the entry in registers or any other documents. All incorrect entries, except those clerical nature, should be scored out under attestation. Therefore the person shall enter correct entries only. If the registers or any other document maintained electronically, a log of every entry modification or deletion has to be maintained.
Consequences of Not Maintaining Proper Records
If a registered person, required to maintain the records under GST, fails to do so will attract a penalty. Also, the goods or services shall apply as the unaccounted goods or services supplied by the taxpayer and the assessing officer shall calculate the liability on such unaccounted goods or services and the taxpayer should pay the tax liability thus calculated along with the penalty.
How Long Accounts Have to be Maintained under GST?
All registered taxpayers should maintain the book of accounts and other records for a period of 6 years from the due date of filing of annual return for the year. In case, if the taxpayer involved in an appeal or revision or any other proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal or court, then the taxpayer should maintain all the accounts and books for a period of one year after final disposal of such appeal or revision or proceedings or investigation, or for 6 years, whichever is later.
For more clarity on the maintenance of the records, the below section will explain the need for specific sectors:
- The quantitative details of raw materials or services used
- Quantitative details regarding goods manufactured during the specific period
- Quantitative details related to the by-products and waste generated during the specific period of time.
Books of accounts in reference to a period for which the taxpayer recorded the details particular goods. Any record that relates to:
- Dispatching movement
- Disposal of such goods
Transporters must maintain records of goods transported, delivered and stored in transit including GSTIN of the registered consignee, wherever applicable. In addition to the above, transporters would also require e-way bill registration for carrying on the business of transporters.
Clearing and Forwarding Agents
In addition to the book of accounts, all clearing and forwarding agents must maintain all the details of delivery/dispatch of goods and record of goods handled.
All service providers should maintain the details of goods used for providing services, input services used during the period and services provided during the tax period.
In the case of workforce providers, the following details must also be maintained:
- Names and addresses of persons contracted as workers, description, value, and quantity of goods and services received for the execution of work
- Name and address of the suppliers and details of payment received in respect of each contract.
Agencies should maintain the below following details under GST:
- Particulars of authorization received by him from each principal
- Particulars including description, value, and quantity of goods and services received and supplied on behalf of every principal.
- Details of accounts furnished to every principal.
- Tax paid on receipts or the supply of goods or services effected on behalf of every principal.
Agents, Brokers, Real Estate Brokers and Stock Brokers
The word Agent means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another. All agents or brokers, including real estate agents and brokers, should maintain the following additional records:
- Particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately;
- Particulars including description, value and quantity (wherever applicable) of goods or services received on behalf of every principal;
- Particulars including description, value and quantity (wherever applicable) of goods or services supplied on behalf of every principal;
- Details of accounts furnished to every principal; and
- Tax paid on receipts or the supply of goods or services effected on behalf of every principal.
- The names and addresses of the persons on whose behalf the works contract is executed;
- Description, value and quantity (wherever applicable) of goods or services received for the execution of works contract;
- Description, value and quantity (wherever applicable) of goods or services utilized in the execution of works contract;
- Details of payment received in respect of each work contract; and
- The names and addresses of suppliers from whom he received goods or services.