Accounts and Records under GST
As a part of digital India initiative, the indirect taxation system of India was so crafted to go hand in hand with the technology today. However, in order to ensure the GST mechanism and technology are synchronised to the point, it is essential the accounting data is shared evenly between the two. Thus, GST council have made amendments that mandates timely and apposite maintenance of account books and ledgers by a taxpayer registered under GST rules
As per Section 35 of the GST Act, a taxpayer has to maintain the following records
- Goods Produced/Manufactured: Details of goods produced in a factory or production house.
- Inward and Outward Supply of Goods/Services: Purchase and sales procured in the given tax period
- Stock Register: Details of the stock as available in your inventory
- ITC availed: Details of the ITC availed in the given tax period
- Output tax liability: Details of the outstanding GST liability for the given tax period
- Tax Paid: Details of the tax paid in the given tax period
- Other Records(as Specified): Details of accounts/records specified by the government through notifications.
Along with these records, a taxpayer is also required to maintain the following accounts
Benefits of maintaining these accounts and records
- Input and Output CGST account
- Input and Output SGST account
- Input and Output IGST account
- GST Electronic Ledger, to be maintained on the GSTN portal, under below-mentioned segments:
- Electronic Liability ledgers:- The electronic record of tax liabilities of the taxpayer. These liabilities include
- Tax applicable [based on return forms]
- Reversal of ITC
- Interest or late fees (if any)
- Electronic Credit Ledger:- The electronic record of the self-assessed ITC claimed by the taxpayer. These records include ITC available on
- Inward Supplies
- Distribution from input services distributor (ISD)
- The input of stock held/semi-finished goods or finished goods held in stock
- Electronic Cash Ledger:- The record of cash deposited by the taxpayer in order to settle/make payment online for tax liabilities.
Even though the number of accounts a taxpayer has to maintain might look mammoth, the maintenance of these records and accounts can help you in the long run as it
- It helps you keep a track of your GST transactions.
- Help you set off the input tax on service directly with output tax on the sale.
- Help you calculate tax liability precisely.
Additional GST accounts
As per the Accounts and Records Maintenance Rules under GST, all taxable persons registered under GST are required to maintain the following accounts in addition to the records mentioned above.
According to the GST Accounts and Records Rules, if any taxable goods are found to be stored at any place(s) other than those declared by the taxpayer in his/her accounts or records, without any other proof or valid documents; Then, the Officer would be empowered to levy tax, as if such goods have been supplied by the registered person. Hence, it's important to maintain a proper record of inventory and goods-in-transit under GST.
Key points to consider while maintaining the GST accounts
- The GST accounts and records, as well as the accounting books, have to be maintained at the principal place of business (along with records relating to the additional place of business)
- Each volume of books consisting of GST records is required to be numbered manually.
- Any entry requiring erasure, effacing or overwriting shall be scored out under attestation, followed by updating of correct entry.
- In the case of E-ledgers, the taxpayer is required to keep a log of every edit or deletion of entry made in the ledger.
- Also, the electronic records are required to be authenticated with a digital signature of the taxpayer.
Consequences of irregular maintenance of GST account and records
As per the GST Act, it is mandatory for every registered taxable person to maintain the accounts books and records for at least 72 months (6 years). The period will be counted from the last date of filing of Annual Return for the given financial year.
In scenarios, wherein the taxpayer fails to maintain proper records in respect of goods/services, the authorised officer shall treat such unaccounted goods/services as if the taxpayer had supplied them. The officer will determine the tax liability on such unaccounted goods
These tax liability shall be calculated along with penalty, payable by the taxpayer.
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