Accounts, records and audit under GST

Every registered person is required to keep accounting books up to 72 months the due date of filing annual return for a particular year.

For example, for the financial year 2017-18, accounting records must be kept up to December, 2024. Reason being 72 months from due date of filing the annual returns (December 31, 2018 in this example) will end on December 2024.

Chapter VIII of CGST Act, 2017 containing section 35 and section 36 specifies the requirements of Accounts and other records as well as retention of these documents.

What are the documents to be maintained or kept under GST by a registered person?

Section 35 of CGST Act, 2017 specifies the documents to be maintained by a registered person.  Every registered person shall keep and maintain at his principal place of business a true and correct account of :

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; and any other document as may be prescribed

These records can be kept in electronic form. Further if tax payer makes supplies from different business place, then each business place should have its accounting records.

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.

If accounting records as specified above are not maintained or 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, as the case may be, shall, mutatis mutandis, apply for determination of such tax.

What is the audit limit under GST for a financial year?

Audit limit for audit under GST is Rs. 2 crore (20,000,000), every registered person whose turnover exceeds prescribed limit should get his accounts audited by a Chartered Accountant (CA) or a Cost Accountant.

For how many year the accounting records should be maintained and kept under GST?

As per section 36 of CGST Act, 2017 every registered person is required to maintain his books of account or other records and retain them until the expiry of 72 months from the due date of furnishing the annual return for the year pertaining to such accounts and records.

In case of any dispute such as appeal or revision or any other proceeding or the matter is under investigation ( consider court and all other proceedings, check section for complete list ), accounting records should be retained 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.