In this article we will discuss the rules regarding maintenance of records as per the GST regime.
The introduction of the GST has not just been introduced to simplify the tax structure of indirect taxation. The goal was to also plug a lot of discrepancies and leaks in the system which once fixed would improve transparency and financial reporting in the system. So besides changes in the rates and the procedure of filing returns, there are changes in the way businesses are expected to maintain records going forward.
When you apply for a GSTIN, you will have to provide some crucial documents to the authorities. You will have to submit all the details regarding the various places where your company carries on its business. Your commercial office along with warehouses will be considered to be places of business.
The Goods and Services Tax (GST) is a tax reform that aims to eliminate India’s major indirect taxes – VAT, Excise and Service Tax. However, the GST laws mandate that all registered persons who are under GST, must maintain accounts and GST records in a particular manner.
The record-keeping requirements are explained in the Section 35 of the GST Act. In addition to that , in April 2017 central government released the draft rules for GST records and accounts (draft record rules), which lists the additional GST record-keeping and accounting requirements.
In this article we will discuss in detail these rules regarding maintenance of GST records and the regulations surrounding them.
Place of Business
Under the GST, “place of business” includes the following:
- A place from where the business is normally carried out. It could be godown, a warehouse or any place where taxable person stores the goods, receives or supplies services or goods or both, or
- A place where the books of accounts are maintained or
- A place where a person who pays tax is engaged in business through an agent or whatever name by which it is called.
Under the GST Registration, certain documents are required to be maintained by all registered taxpayers at their place of business.
GST Records & Documents to Be Maintained
Under the GST, all the registered taxpayers are required to maintain the following records and accounts at their place of business.
- The details of manufacture or production of goods;
- The details of the inward and outward supply of services or goods or both
- Stock of goods
- The input tax credit availed;
- The output tax payable and paid;
- And any other particulars as may be agreed.
Under the Indian taxation system, all the goods and services are categorized into 6 slabs. It is significant for all business people to know under which category their goods or services fall. The GST rate finder service is used to find the GST rates of all the goods and services. This service is also referred to as the HSN finder. By using the HSN finder, we can also find the HSN codes for goods and services.
In case there is more than one place of business, then accounts relating to each of these places of business must be kept at that place. Records and accounts under the GST can be maintained in both electronic or the book format
Mandatory Documents Maintenance Required
Transporters, operators or owners of godown, warehouse or any other place which is used for the storage of goods that are required to maintain records of the consigner, the consignee and the other details of the goods transported / held by them, whether the person is registered or not.
How Long Accounts Have to Be Maintained Under GST?
It is mandatory for all the registered taxpayers to maintain the book of records and accounts for a period of 6 years from the due date of the filing of the annual returns for the year. If the taxpayer is involved in an appeal of the revision or any other proceeding before any Revision Authority or Appellate Authority or the Appellate tribunal or court, then all the accounts and the books must be maintained for a period of one year after the final disposal of such an appeal or proceedings or revision or for 6 years ,whichever is later.
The rules of GST state that all businesses must maintain their book of accounts and other relevant records even after filing their monthly or annual returns. You must keep them available for a minimum of 6 years after filing the annual returns. The authorities may require it later.
Like it or not, GST is here to stay. And when you look at the macro economic picture, then you realise that GST seems confusing only because it is new and we are too used to the old system. Adapting to change takes time and old habits die hard.
This is true of not just taxpayers, but tax professionals as well. But the sooner we start accepting the advantages of this system and become proactive in understanding its system the sooner we will be able to reap its benefits. If you have any other queries with regards to taxes or require any assistance with regards to the same, get in touch with us and we will ensure that you receive the best professional guidance for your requirements.
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