29 Sep 2017, 14:19 — 6 min read
India’s unified tax structure has been subsumed by the all-encompassing GST. Earlier, traders were required to maintain to different records for the different taxes they were paying - VAT, Excise and so on. Now, in what will be a relief to most business, they only need to maintain the books for GST.
Section 35 of the GST Act explains the record-keeping requirements. In addition, in April 2017 the central government has released draft rules for GST accounts and records (draft record rules), which listed additional GST accounting and record-keeping requirements.
Each registered taxpayer is required to maintain a true and correct account of the following at each place of its business:
In addition, the rules also provide that the registered person shall keep and maintain records of :
Apart from the above requirements, manufacturers, agents, brokers, work contractor, owner or operator of a go down or warehouse and a transporter have to adhere to some additional record keeping rules.
Records and accounts under the GST can be maintained in both electronic or the book format. Each of the volumes of books of account with GST records maintained manually should be serially numbered. While maintaining GST accounts manually, if any entry in any of the registers or accounts or documents is erased, effaced or overwritten, then it should be scored out under attestation and thereafter correct entry should be recorded.
If accounts are maintained in electronic form, the following points must be borne in mind:
The records or documents should be produced on demand, authenticated by the person, in hard copy or in an electronically readable format. The person should also provide on demand, the details of the files, passwords of the files and explanation for codes used (where necessary) for access to the files, along with a sample copy in print form of the information stored in the files.
Period for preservation of accounts: All accounts maintained together with all invoices, bills of supply, credit and debit notes and delivery challans relating to stocks, deliveries, inward supply and outward supply shall be preserved for seventy-two months (six years) from the due date of furnishing of annual return for the year pertaining to such accounts and records and shall be kept at every related place of business mentioned in the certificate of registration.
To put it briefly, the game changer indirect tax regime calls for detailed records to be kept not only by suppliers of goods or services but also by intermediaries such as warehouse owners, transporters, and agents. In addition, they also have to track stocks given as free samples or gifts thus bringing in more transparency.
Other than adhering to the legal requirements record keeping can help you to:
Initially, the businesses may find it difficult to adjust to the new tax regime, more so for the smaller players, but it can be reasonably expected that tax leakages within the GST chain will be effectively plugged in and it will contribute to better tax compliance mechanism.
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