CHAPTER-8 ACCOUNTS AND RECORDS

INTRODUCTION

• Assessment under GST is centered on self-assessment. Every registered person shall himself assess the tax payable by him for a tax period and after such assessment, he shall file the return required under section 39 of the CGST Act,2017.
• For this purpose, every person registered under GST Act, must maintain all accounts and records at his principal place of business and these records could be electronic or manual.
• The provisions relating to accounts and records required to be maintained under GST are contained in sections 35 and 36 of CGST Act 2017 read with Rules 56 to 58 of CGST Rules 2017.

Section-35 Accounts and other records

(1) Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of-

• • production or manufacture of goods;
  • inward and outward 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:

Provided that where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business:

Provided further that the registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed.

(2) Every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed.

(3) The Commissioner may notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified therein.

(4) Where the Commissioner considers that any class of taxable person is not in a position to keep and maintain accounts in accordance with the provisions of this section, he may, for reasons to be recorded in writing, permit such class of taxable persons to maintain accounts in such manner as may be prescribed.

(5)[***]^[1]

(6) Subject to the provisions of clause (h) of sub-section (5) of section 17, where the registered person fails to account for the goods or services or both in accordance with the provisions of sub-section (1), the proper officer shall determine the amount of tax payable on the goods or services or both that are not accounted for, as if such goods or services or both had been supplied by such person and the provisions of section 73 or section 74 [or section 74A]^[2], as the case may be, shall, mutatis mutandis, apply for determination of such tax.

References for Amendments:

[1] Sub-section (5) Omitted by the Finance Act, 2021, w.e.f. 01.08.2021. It was amended earlier by the central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 1-2-2019, read as under:-
“(5) 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:
Provided that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”
[2] Inserted vide The Finance (No.2) Act, 2024 (No. 15 of 2024) dated 16.08.2024, to be bought in force w.e.f. 01.11.2024 Notification No. 17/2024-Central Tax dated 27.09.2024. 

Section-36 Period of retention of accounts

Every registered person required to keep and maintain books of account or other records in accordance with the provisions of sub-section (1) of section 35 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:

Provided that a registered person, who is a party to an appeal or revision or any other proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal or court, whether filed by him or by the Commissioner, or is under investigation for an offence under Chapter XIX, shall retain the books of account and other records pertaining to the subject matter of such appeal or revision or proceedings or investigation for a period of one year after final disposal of such appeal or revision or proceedings or investigation, or for the period specified above, whichever is later.