Goods And Services Tax Law: Accounts And Records To Be Maintained

goods and services tax law gst taxes records to maintain

Whether it be colleges, jobs or business, keeping an account of all the important personal and legal documents is quite necessary. While the personal legal documents are proof of the individual’s residence or nationality, bookkeeping of the legal business documents is used for verification purposes regarding the incorporation and working of the business. 

1. What is GST? 
2. Section 35- GST (Goods and Services Tax) Act 
3. Records to be maintained under the GST Act 
4. GST and Accounting 
5. Ledgers under GST 
6. The retention period for the maintenance of accounts 
7. The penalty of not maintaining the records 
8. Conclusion 

What Is GST? 

The Goods and Services Tax (GST) was introduced in July 2017, with the aim of unification of taxes in the country. This was done to make the process of tax filing simpler and quicker without having to pay separate taxes. GST has to be paid at the state and the central level called SGST and CGST. Any individual or company registering for the GST has to compulsorily maintain records of the business, the registration, and documents of all the processes along with the income statement taking place in the business. For the complete GST procedure, one must always take the advice of the chartered accountant. 

• Section 35- GST act 
• Records to be maintained under the GST act 
• GST and accounting 
• Ledgers under GST 
• The retention period for the maintenance of accounts 
• The penalty of not maintaining the records 
• Conclusion 

Section 35- GST (Goods And Services Tax) Act 

As per Section 35 of the GST Act, every individual who is registered under the GST act has to mandatorily maintain the account and records of the business which can be verified by the GST authority at any point in time. The bookkeeping can be in both physical and digital formats. 

The records have to be kept at all the places, whether it be the main office or the storage and godown, wherever the business is being carried out along with the registration certificate. In the case of electronic records, the server must be based in India. 

Records To Be Maintained Under The GST Act 

Under the GST, the records can be verified by the chartered accountant to avoid any mistakes by keeping a balance sheet of the account. The list of records and account to be maintained by the registered members of GST include the following: 

• The manufacture amount of goods in case of a manufacturing business, and service records for other companies. 
• Supplies of the goods and services, both inward and outward as per the conditions. 
• Stock register 
• Sales register 
• Purchase register 
Availing of the input tax credit (for a specified time period for which the taxes are paid) 
• Liability of the output tax 
• An account of the output tax that has been paid 
• Other tax accounts and documents such as income statements, etc. Bookkeeping of the documents as specified by the government. 

GST And Accounting 

While GST might seem like a more complex process of tax payment maintaining the income statement and balance sheet procedures, due to the increased number of account maintenance, but, if closely reviewed the bookkeeping and accounting procedure under GST is more simplified. 

Ledgers Under GST 

After registration, every taxpayer gets registered for 3 types of ledgers under GST, which have to be maintained electronically. These include: 

• Cash Ledger: This is like an electronic wallet. All the deposits have to be made into this account that will show the income statement. Further payments will be done using this amount. 

• Credit Ledger: The tax on all the purchases made by the member will be registered in this account, under IGST, CGST, and SGST. Additionally, the taxes will be paid using the balance amount in this account. 

• E-Liability Ledger: After all the payments and accounts for the month are completed, this ledger shows the net or remaining tax liability. 

A balance sheet can be also maintained digitally to reduce the stress of income statements and management. To tackle all the GST procedures, one can always seek the advice of the chartered accountant to maintain the business deals. 

The Retention Period For The Maintenance Of Accounts 

Once all the taxes are paid and the legal GST procedures are completed, the balance sheet and the records have to be maintained by the registered taxpayer for a time period of 6 years (72 months) as per the GST act. The time period of the records will be counted from the last day of annual record filing. 

The Penalty Of Not Maintaining The Records 

If the taxpayer fails to maintain the records, they will have to pay a penalty along with taxes as decided by the assessing officer. Additionally, if the records of the goods and services are not maintained, they will be treated as being supplied by the taxpayer themselves. 


As such, under the GST Act, it is mandatory to keep a track of the records and accounts of the business. In case one is unable to record, they can hire a chartered accountant for help and advice.

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