12.

ACCOUNTS AND RECORDS

Content of Chapter 12
Concept 1: Introduction & Important Definitions
Concept 2: Books of Accounts
Concept 3: Additional Requirements
Concept 4: How the accounts and records will be maintained?
Concept 5: What are the consequences of failure to maintain the accounts?
Concept 6: Period of retention of accounts

Concept 1: Introduction and Important Definitions

i. Department can do compliance verification through documentary checks.
ii. This requires certain obligations to be cast on the taxpayer for keeping and maintaining accounts
and records.
iii. Every registered person shall keep and maintain all records.
iv. Responsibility has been casted on the owner or operator ofwarehouse or godown or any other
place used for storage of goods and on every transporter to maintain specified records even if they are
not registered underGST.
v. Further, there is no prescribed format for maintaining the accounts.

Concept 2: Important Definitions

a. 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 carried on the business of
supply or receipt of goods or services or both on behalf of another [Section 2(5)].
b. Place of business: includes [Section 2(85)]:

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 accounts; or

a place where a taxable person is engaged in business through an agent, by whatever name called.

c. Principal place of business: means the place of business specified asthe principal place of business
in the certificate of registration [Section 2(89)].

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 12. ACCOUNTS AND RECORDS
Concept 2: Book of Accounts

2.1 Every Registered person is required to maintain books of account at

i. PPOB
ii. All APOB mentioned in RC
PPOB - Principle Place Of Business
APOB - Additional Place Of Business

2.2 Which accounts and records are required to be maintained?

A true and correct account of following is to be maintained:
1. production or manufacture of goods;
2. inward and outward supply of goods or services or both;
3. stock of goods;
4. input tax credit availed;
5. output tax payable and paid
6. such other particulars as may be prescribed.
True and correct account of
i. G/S imported / exported
ii. 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
and refund vouchers
iii. Separate account of advances received, paid and adjustments made
iv. Names and complete addresses of suppliers from whom he has received the G/S
v. Names and complete addresses of the persons to whom he has supplied goods or services
vi. Complete address of the premises where goods are stored, including goods stored during transit

Note 1 : Following details are required in relation of stock and tax to be

(a) Stock of goods:

1. Opening Stock
2. Receipt
3. Supply
4. Goods lost, stolen destroyed, w/off disposed off as gift or sample
5. Balance of stock

(b) Details of tax:

1. Tax payable
2. Tax payable under RCM
3. Tax collected & Tax paid
4. ITC claimed
5. Register of tax invoice, credit notes, debit notes delivery challans

Note 2: Composition supplier need not maintain details of stock and tax details

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 12. ACCOUNTS AND RECORDS
Concept 3: Additional Requirements
Particulars Details
Agent 1. Particular of authotisation received from each principal
2. Value, qty of G/S received or behalf of principal
3. Value, qty of G/S supplied on behalf of principal
4. Details of accounts furnished to every principal; and
5. Tax paid on receipts/ supply of goods/services effected on behalf of every principal.

Manufacture 1. Monthly production accounts showing quantitative details of raw materials/services

used in the manufacture (inputs)
2. Quantitative details of the G so manufactured (output)
3. Waste and by products thereof.

Service Provider 1. Quantitative details of G used in the provision of services

2. Input services utilised and the services supplied.
Person executing 1. The names and addresses of the persons on whose behalf work is executed
works contract 2. Description, value and quantity of G/S received and utilized
3. Details of payment received
4. Names and addresses of suppliers from whom he received G/S

Custodian / Maintain true and correct records in respect of such goods handled by him on behalf of
clearing and such registered person and shall produce the details thereof as andwhen required
forwarding agent by the proper officer
Owner/operator 1. Shall maintain records of the consigner, consignee and other relevant details of the
of a warehouse / G
godown and 2. If such persons are not already registered, they shall obtain a unique enrollment
transporter number by applying electronically [In Form GST ENR-01] at the GST Common Portal.
whether
registered or not 3. Such person, once obtained unique enrollment number, shall not be eligible to use any
of the GSTIN.

Transporter 1. Maintain records of G transported delivered and

2. goods stored in transit by him
3. GSTIN of the registered consignor and consignee
4. for each of his branches.
Owner/operator
of a warehouse / 1. Maintain books of accounts with respect to the period for which particular goods
godown remain in the warehouse.

2. particulars relating to dispatch, movement, receipt, and disposal of such goods.

3. The owner or the operator of the godown shall store the goods in such manner that
they can be identified item-wise and owner-wise and shall facilitate any physical
verification or inspection by the proper officer on demand.

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Concept 4: How the accounts and records will be maintained?
1. Records may be maintained manually and each volume of book shall be serially numbered
2. Records may be maintained in electronic form
(a) Stored on any electronic device.
(b) Record maintained shall be authenticated by means of a digital signature.
(c) Proper electronic back-up of records shall be maintained and preserved.
(d) The event of destruction of such records due to accidents or natural causes, the information can be
restored within a reasonable period of time.

(e) The registered person maintaining electronic records shall produce, on demand, the relevant records or
documents, duly authenticated by him, in hard copy or in any electronically readable format.

(f) He shall, on demand, provide the details of such files, passwords of such files and explanation for
codes used for access and any other information

3. No entry to be erased/overwritten
Entry in registers, accounts and documents shall not be erased, effaced or overwritten.
a. No entry shall be erased effaced or overwritten
b. All incorrect entries shall be scored out under attestation and there after correct entry shall be
recorded.

c. A log of every entry edited or deleted shall be maintained in case of electronic books.

4. Accounts maintained by the registered person together with all the invoices, bills of supply, credit and debit
notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply shallbe
preserved for the period as provided

5. Every registered person shall, on demand, produce the books

Concept 5: What are the consequences of failure to maintain the accounts?

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/section 74, shall apply for determination of such tax.

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 12. ACCOUNTS AND RECORDS
Concept 6: Period of Retention of accounts
1. Every registered person required to keep and maintain books of account or other records until the expiry of
72 months from the due date of furnishing of annual return for theyear pertaining to such accounts and
records.

2. FY 23-24 AR due date 31st Dec 24 72 m Maintain Books

3. In case of appeal revision or investigation maintain books

1 year after disposal of such appeal / investigation / revision

Or
Relevant FY for which appeal relates to due date of AR + 72 months

Accounts and records required to be maintained

A true and correct account of following is to be maintained:

Inward and Output

Production or Stock Records
outward supply ITC tax
manufacture of prescribed
of goods or availed payable
of goods goods by rules
services or both and paid

A true and correct account of:

Goods /
Services
Suppliers of Reverse charge imported /
goods / services supplies along exported
chargeable to with relevant
tax documents Separate
account of
Names and advances
Recipient of addresses of
goods / services
Address of the
premises
where goods
are stored

Records which are to be maintained only by a supplier other than a supplier

opting for composition levy

Account of stock of goods received and Account of details of tax payable,collected and
supplied including opening balance, receipt, paid, ITC claimed, together with register of tax
supply, goods lost/stolen, destroyed, written invoice, credit-debit notes, delivery challan
off, gifted, free samples, stock balance. issued/received during any tax period

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Questions

1. Who is required to maintain books of accounts and at which place in terms of Section 35 read with
relevant rules?
2. Mr. Sky is engaged in the business of trading of mobiles. He is eligible for composition scheme and
has opted for the same. He seeks your advice forrecords which are not required to be maintained
by him as composition taxable person.
3. Mr. Harsh Manjula is engaged in the business of works contract services and request your
guidance as to specific records required to be maintained by him under GST law, if any.
4. Chill Chain Cold is operating cold storage warehouse and seeks your guidance on the GST
accounts and records to be maintained by them in terms of Section 35.
5. Mr. X is of the view that records are to be mandatorily maintained manually only. You are
required to examine the view taken by Mr. X?

Answer:

1. Every registered person shall keep and maintain, his books of accounts at his principal place of
business and books of account relating to additional place of business as mentioned in the
certificate of registration. 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.
2. A supplier who has opted for composition scheme is not required to maintain records relating
to;
(a) Stock of goods: 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, writtenoff or disposed of by way of gift or free sample and the balance ofstock
including raw materials, finished goods, scrap and wastage thereof.
(b) Details of tax: Account, containing the details of tax payable (including tax payable under
reverse charge), 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.
Thus, Mr. Sky is not required to maintain above mentioned records.
3. Mr. Harsh Manjula, executing works contract shall keep separate accounts for works contract
showing
• the names and addresses of the persons on whose behalf the workscontract is executed;
• description, value and quantity (wherever applicable) of goods/servicesreceived for the
execution of works contract;
• description, value and quantity (wherever applicable) of goods/servicesutilized in the
execution of works contract;
• the details of payment received in respect of each works contract; and the names and addresses
of suppliers from whom he received goods orservices.
4. Chill Chain Cold shall maintain records of the consigner, consignee andother relevant details
of the goods in the prescribed manner.

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 12. ACCOUNTS AND RECORDS
Chill Chain Cold shall also maintain books of accounts with respect to the period for which
particular goods remain in the warehouse, including theparticulars relating to dispatch,
movement, receipt, and disposal of such goods.Chill Chain Cold shall store the goods in such
manner that they can be identified item-wise and owner-wise and shall facilitate any physical
verification or inspection by the proper officer on demand.
5. The view taken by Mr. X is not valid in law. Books of account include any electronic form of data
stored on any electronic device. The registered person may keep and maintain such accounts
and other particulars in electronic form stored on any electronic device and record so
maintained shall be authenticated by means of a digital signature. The registered person
maintaining electronic records shall produce, on demand, the relevant records or documents,
duly authenticated by him, in hard copy orin any electronically readable format.
Where the accounts and records are stored electronically by any registered person, he shall, on
demand, provide the details of such files, passwords of such files and explanation for codes
used, where necessary, for access andany other information which is required for such access
along with a sample copy in print form of the information stored in such files.

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Rapid Fire Quiz

1. State the correctness of statement -"Place of business includes a place where a taxable person is
engaged in business through an agent, by whatever name called".

2. Is it valid that document includes written or printed record of any sort but does not include
electronic record?

3. Mr. X contends every owner has to maintain records of the consigner & consignee only if he is a
registered person ? Is Mr. X correct?

4. Mr. Yuvi, a registered person imported raw material to be used in the manufacture of finished
goods. He opines that he is not required to maintain account of goods imported. Is he correct?

5. Miss Taavi, a composition dealer is of the view that she is not mandatorily required to maintain
account of goods disposed of by way of gift. Is her view valid in law?

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CROSSWORD PUZZLE

ACROSS
2. All incorrect entries, otherwise than those of ------nature, shall be scored out under attestation.
3. Every registered person is required to retain books of account until the expiry of 72 months from the
due date of furnishing of -----return.
7. Every------------ person shall keep and maintain, books of accounts at his principal place of business
and books of account relating to additional place of business.
8. Every transporter shall maintain records of goods transported, delivered and goods stored in---------
---- by him.
9. Stock of -----------is not required to be maintained by a supplier who has opted for composition
scheme.
10. Every manufacturer has to maintain -------production accounts showing quantitative details of raw
materials/services used in the manufacture.
11. Every transporter shall maintain record of GSTIN of the registered consignor and consignee for ----
----------of his branches.

DOWN
1. The operator of a warehouse is required to obtain a unique ------- number if not already registered.
4. The owner of the godown has to store the goods so that they can be identified --------wise and
owner wise.
5. Books of account include any----------- form of data.
6. Any entry in registers, accounts and documents shall not be ---------

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For Answers Scan the QR

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