Are we maintaining documents and records as required under GST Laws? – A Big Question

[Anuj Bansal]

By this time every tax professional is aware that GST is mainly following various kinds of compliances like filing of returns, e-way bills, etc. The department is silent and accepting all the returns, etc., without raising much issues. The intention is to provide a breathing or settling time to industry. However, till date no attention is given to the documents or records maintained or to be maintained in order to support the details / data furnished in our returns, etc.  For example, if the ITC relating to gifts, loss of goods, etc., is reversed, whether we are recording such gifts / loss in our stock register, as required under Rule 56(2) of the CGST Rules. Similarly, whether we are maintaining electronic back-up of all our documents / records, as required under Rule 57 of the CGST Rules. In other words, the department is accepting our returns as self assessed returns. But the future will not be the same. There are numerous documents / records   which are prescribed under the law specifically in Section 35 of CGST Act read Rules  56 to 58 of CGST Rules which are required  to be maintained  by every dealer.  Once the GST is settled, then surely the department will get active and reconcile / review the returns with the documents and records maintained. For doing so the department is equipment with various online tools. Even the department may invoke provisions relating to Audit, Investigation, Search, Special Audits, etc. Therefore, the above has given an important thought to write this article with specific focus on documents and records to be maintained in GST regime. On analyzing Section 35 read with Rules 56 to 58, a dealer is required to maintain the following documents:-

Documents to be Maintained:

1. Production or Manufacture of goods - Every registered person manufacturing goods shall maintain monthly production accounts showing quantitative details of raw materials or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by products thereof;

2. Inward and outward supply of goods or services or both;

3. Stock of goods - Accounts of stock in respect of goods received and supplied, and such accounts shall contain the following particulars:
   1. Opening balance,
   2. Receipt,
   3. Supply,
   4. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample
   5. Balance of stock

above stock shall be maintained for each of the items like raw materials, finished goods, scrap, wastage, etc.

4. Account of the goods or services imported or exported or of supplies attracting payment of tax on reverse charge along with the relevant documents, including invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers and refund vouchers.

5. Every registered person shall keep and maintain a separate account of advances received, paid and adjustments made thereto.

6. Details of Tax Payable and Input Tax– Every person shall keep and maintain the following accounts:
   1. Details of Tax Payable,
   2. Details Tax Collected and Paid,
   3. Details of Input Tax and Input Tax Credit claimed,

above shall be supported with a register of Tax Invoice, Credit & Debit Notes, Delivery Challan issued or received during any tax period.

7. Documents to be maintained by Service Provider – Every registered person supplying services shall maintain the accounts showing quantitative details of goods used in the provision of services, details of input services utilised and the services supplied.

8. Documents to be maintained by Work Contractor – Every registered person executing works contract shall keep separate accounts for works contract showing –
   1. the names and addresses of the persons on whose behalf the works contract is executed;
   2. description, value and quantity (wherever applicable) of goods or services received for the execution of works contract;
   3. description, value and quantity (wherever applicable) of goods or services utilized in the execution of works contract;
   4. the details of payment received in respect of each works contract; and
   5. the names and addresses of suppliers from whom he received goods or services.

9. Every agent shall maintain accounts depicting the,-
   1. Particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately;
   2. Particulars including description, value and quantity (wherever applicable) of goods or services received on behalf of every principal;
   3. Particulars including description, value and quantity (wherever applicable) of goods or services supplied on behalf of every principal;
   4. Details of accounts furnished to every principal; and
   5. Tax paid on receipts or on supply of goods or services effected on behalf of every principal.
10. Every registered person shall keep the particulars of –
    1. names and complete addresses of suppliers from whom he has received the goods or services chargeable to tax under the Act;
    2. names and complete addresses of the persons to whom he has supplied goods or services, where required under the provisions of this Chapter;
    3. the complete address of the premises where goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.

Other Misc. Provisions:

1. Any entry in registers, accounts and documents shall not be erased, effaced or overwritten, and all incorrect entries, otherwise than those of clerical nature, shall be scored out under attestation and thereafter, the correct entry shall be recorded.

2. If the registers and other documents are maintained electronic form, a log of every entry edited or deleted shall be maintained.

3. If any taxable goods are found to be stored at any place(s) other than those declared without the cover of any valid documents, the officer shall determine the amount of tax payable, as if such goods have been supplied by the registered person.

4. In any documents or books of accounts belonging to the registered person are found at any premises other than those mentioned in the certificate of registration, they shall be presumed to be maintained by the said registered person.

5. Every registered person shall produce the books of accounts which he is required to maintain under any law for the time being in force.

Documents shall be maintained at:

Documents shall be kept and maintained at the registered place of business, as specified in Registration certificate. However, incase, where there are more than one place of business in the certificate of registration, the accounts relating to each such place of business shall be maintained.

Moreover, the documents may be kept and maintained in electronic form and the record so maintained electronically shall be authenticated by means of a digital signature.

Each volume of books of account maintained manually by the registered person shall be serially numbered.

Period for preserving the Books of Accounts and other documents:

Accounts maintained by a person shall be preserved for a period of seventy two months from the due date of furnishing the Annual Return. All the invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply shall also be preserved, as stated above. However, where such accounts and documents are maintained manually, the same may be kept at every related place of business mentioned in the certificate of registration.

However, Books of Accounts and Documents pertaining to subject matter of any Appeal or Revision or proceedings or investigation shall be maintained for a period of one year after the disposal of the matter or above period of seventy two months whichever is later.

Electronic Back-up of the Documents and Records:

A dealer is required to maintain electronic back-up of all the records and preserved in a manner that in the event of destruction of records due to accident or natural causes, the information can be restored within a reasonable period of time.

If required by the department, the electronic records shall be produced in hard copy or in electronic readable format duly authenticated by the dealer. On demand by the department, the dealer shall provide all files, password of such files, etc. to the department.

On the basis of above, it would be appreciated that documents maintained are required to be reviewed and it has to be ensured that documents / records are maintained as per the requirements of the law. Moreover, since, the financial year 2017-18 has ended, therefore, this is the right time to review and analyze the documents being maintained and relied upon for filing the returns, etc.