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Accounts To Be Maintained Under Goods and Services Tax Law

Account/Records / Information Required / By Whom?
Register of Goods Produced / Account should contain detail of goods manufactured in a factory or production house / Every assessee carrying out manufacturing activity
Purchase Register / All the purchases made within a tax period for manufacturing of goods or provision of services / All Assessee
Sales Register / Account of all the sales made within a tax period must be maintained / All Assessee
Stock Register / This register should contain a correct stock of inventory available at any given point of time / All Assessee
Input Tax Credit Availed / This register should maintain the details of Input Tax Credit availed for a given tax period / All Assessee
Output Tax Liability / This register should maintain the details of GST liability outstanding to be adjusted against input credit or paid out directly / All Assessee
Output Tax Paid / This register should maintain the details of GST paid for a particular tax period / All Assessee
Other Records Specified / Government can further specify by way of a notification, additional records and accounts to be maintained / Specific Businesses as notified by the government

Q1. Should every registered person required to maintain books of account?

Ans. Yes. As per Section 35 of the Act, every registered person is required to keep and maintain books of account at his principal place of business that is mentioned in the certificate of registration.

Q2. What are the basic accounts required to be maintained by a person at the principal place of business?

Ans. As per Section 35 of the Act, read with Draft Accounts and Records Rules, the following accounts need to be maintained on a true and correct basis:

  • (a) Production or manufacture of goods;
  • (b) Inward or outward supply of goods or services of both;
  • (c) Stock of goods;
  • (d) Input tax credit availed;
  • (e) Output tax payable and paid;

Q3. What are the additional accounts to be maintained by the registered person under Rule 1 of Accounts and Records Rules, 2017?

Ans. Every registered person, in addition to the records to be maintained under section 35 of the Act, is required to maintain following additional accounts on a true and correct basis:

  1. Goods or services imported or exported;
  2. Supplies attracting reverse charge along with documents (including invoices, bill of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills);
  3. Accounts of stock for each commodity received and supplied – containing particulars of opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples and balance of stock including raw materials, finished goods, scrap and wastage thereof (these details need not be maintained by a composition dealer)
  4. Advances received, paid and adjustments thereto;
  5. Tax payable on reverse charge basis;
  6. Tax payable, tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit note, debit note, delivery challan issued or received during any tax period;
  7. names and complete addresses of suppliers from whom he has received the goods or services;
  8. names and complete addresses of the persons to whom he has supplied the goods or services; and
  9. the complete addresses of the premises where the goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein..

Q4. Is there any specific set of records to be maintained by the provider of works contract service?

Ans. Yes as per Rule 1(15) of Accounts and Records Rules, 2017 the registered person providing works contract service shall maintain the accounts showing-

  • the names and addresses of the persons on whose behalf the works contract is executed;
  • description, value and quantity (wherever applicable) of goods or services received for the execution of works contract;
  • description, value and quantity(wherever applicable) of goods or services utilized in the execution of each works contract;
  • the details of payment received in respect of each works contract; and
  • the names and addresses of suppliers from whom he has received goods or services.

Q5. Where are the books of account liable to be maintained?

Ans. The books of account are to be maintained at principal place of business as mentioned in the certificate of registration.

Q6. In case of more than one place of business, the records are required to be maintained only at principal place of business?

Ans. No, in case of additional places of business, the accounts relating to each place of business shall be kept at such places of business concerned (provided such place is specified in the certificate of registration).

Q7. Whether accounts can be maintained in the electronic form?

Ans. Yes, the registered person may keep and maintain such accounts and other particulars in the electronic form, in the manner as may be prescribed.

Q8. Whether the accounts maintained by the registered taxable person needs to be audited?

Ans. Yes, every registered person whose turnover during a financial year exceeds the prescribed limit of Rs. one crore, shall get his accounts audited by a chartered accountant or a cost accountant and shall submit to the proper officer a copy of the audited statement of accounts, the reconciliation statement under Section 44(2) and such other documents in the form and manner as may be prescribed in this behalf.

Q9. Does the law require an owner/ operator of a warehouse or godowns/ transporter to maintain books of account?

Ans. Yes, every owner/ operator of warehouse or godowns or any other place used for storage of goods and transporter (whether registered or not) needs to maintain records of consigner, consignee and other relevant details as under:

1. For Transporter:

  • Goods transported
  • Goods delivered
  • Goods stored in transit by him and branches

2. For owner/ operator of a warehouse or godowns:

  • Accounts related to that period for which goods remain with him
  • Details of dispatch, movement, receipt and disposal

Further, owner/ operator of warehouse or godowns should store the goods in such a way that identification item-wise and owner-wise is possible and facilitates physical verification/ inspection.

Q10. Is there any form to be submitted by the such persons to maintain books as per section 35?

Ans. Yes, as per Accounts and Records Rules, 2017, owner/ operator of warehouse or godowns or any other place used for storage of goods and transporter if not registered is required to submit the details regarding his business electronically on the Common Portal in FORM GST ENR-01, either directly or through a Facilitation Centre notified by the Commissioner and, upon validation of the details furnished, a unique enrollment number shall be generated and communicated to the said person.

Q11. Is there any specific set of details to be maintained by a supplier of service?

Ans. Yes. As per Rule 1(14) of Accounts and Records Rules, 2017, a supplier of service is required to maintain quantitative details of goods used in provision of each service, details of input service utilized and services supplied.

Invoicing under GST

GST defines a transaction as ‘Supply’ when there is a transfer, exchange, rental, lease, barter, disposal or license of goods or services. Whenever a transaction takes place, a tax invoice has to be issued depending on the occurrence of any such event or within a prescribed time limit. Hence, every taxpayer registered under the GST network shall be required to issue a tax invoice for the supply of goods or services.

Tax invoices have to be raised under certain circumstances. In the case of supply of goods, the invoices shall be raised within the prescribed time as enumerated below.

  • When there is actual movement of goods, then before or at the time of removal of such goods.
  • If there is no movement involved, then earlier of delivery or making available of such goods.
  • In case of successive issuance of goods, then earlier of each such issuance.
  • On the receipt of goods when on GST is applicable on a reverse charge basis
  • When goods are sold on an approval basis, then earlier of 6 months from the removal date or before or at the time of such removal.

Similarly, in the case of supply of services, the invoice has to be issued as follows, within the mentioned time.

  • Within 30 days from the actual supply
  • In case of continuous supply where due date can be ascertained, then 30 days from such due date
  • In case of continuous supply where due date cannot be ascertained, then 30 days from actual payment date
  • In case of cessation of supply before the contract ends, then at the time of such cessation.

The due date of 30 days is 45 days in case of banks and other financial institutions.

These invoices have to be issued in TRIPLICATE in the case of supply of goods, 1.Original for the recipient,

2. Duplicate for the transporter and

3. Triplicate copy for the supplier.

Likewise, in case of supply of services, the invoices have to be issued in DUPLICATE, where the original will be meant for the recipient and the duplicate copy will be for the supplier.

Since your Input Tax Credit largely depends on the Invoice Number and its proper reporting. The serial number of the invoice forms the basis of mismatch or matching the invoices between the supplier and the receiver, giving a seamless, hassle-free credit flow.

here is certain crucial information that needs to be mentioned mandatorily in the GST invoice. These are:

  • Name, address and the GSTIN of the supplier
  • The nature of invoice (tax invoice, supplementary invoice or revised invoice)
  • Invoice number (this shall be a consecutive alpha-numeric or numeric series, specific for a financial year)
  • Date of Invoice
  • Name, address and the GSTIN of the recipient
  • Where the value of the goods exceeds Rupees Fifty Thousand and the recipient is an unregistered person, then name and address of such recipient and the delivery address of the consignment.
  • Description of the goods or services
  • HSN code of the goods or the Accounting Code of the Services
  • Quantity of the goods or services
  • Total value of the goods or services
  • Rate of Tax on each item
  • Tax amount charged, on account of CGST, IGST, and SGST to be shown separately under different columns
  • Name of the supplying State and the place of supply
  • Place of delivery
  • A statement mentioning whether reverse charge is applicable or not
  • Trade Discounts not forming part of value of the goods, if any
  • Signature in physical form or Digital Signature of the supplier or an authorized person, duly certifying the invoice

In addition to the above particulars, an export invoice shall include the following.

  • A mandatory statement mentioning these specific words – “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST.”
  • Country of destination
  • Delivery address
  • The Number and date of application of form for removal, i.e. Form ARE-1

Likewise, when an Input Service Distributor issues the invoice, then “Amount of credit distributed” shall also be added to the invoice instead of the rate and value of the goods or services.

If you are a Goods Transport Agency, you are a critical link in the supply chain and has to include the following in your invoice.

  • Name and address of the consignor and the consignee
  • Registered Vehicle number
  • Gross weight of the consignment
  • Place of Origin
  • Destination
  • GSTIN of the person liable to pay tax

The transporter does not require to the Duplicate copy of the Invoice. Instead, they can opt for Invoice Reference Number, which can be generated by the supplier by uploading the tax invoice onto the GST Portal. The portal shall generate a number that is valid for 30 days from such date.

Apart from the tax invoice, other important documents include Supplementary Invoice, Revised Invoice, Debit or Credit Notes, and Bill of Supply. Let us discuss each one in details.

Bill of Supply

When a registered supplier makes a supply of exempted goods or services, or the supplier is registered under the composition scheme, then he has to issue a Bill of Supply instead of a tax invoice.

Supplementary Invoice / Debit Note

Whenever there is an upward revision in prices of a good or service supplied earlier and the same was chargeable to GST, then the supplier is liable to issue a supplementary invoice to the recipient. The said supplementary invoice should be raised within 30 days from the date of such price revision.

Credit Note

Just like the debit note where there is an upward revision in price, credit note has to be issued when there is a downward revision of price. GST should have been charged in the previous transaction. The credit note has to be issued on or before 30th September of the next financial year or before filing the annual return of GST, whichever is earlier.

The contents of these documents are the same as that of tax invoice. The only major difference is that the nature of the invoice must be mentioned in Bold specifically on top of the invoice. For e.g. “SUPPLEMENTARY INVOICE,” “DEBIT NOTE” etc.

All the above documents, including the tax invoice, has to be maintained for 6 years (currently prescribed by the GST council). Thus, it requires a very strong IT system that records and maintains such a database for the prescribed time.

Cross – Referencing of Invoices

Since the invoice forms a crucial part in claiming credit for the GST paid therein, it is obligatory to upload returns on time so that the credit flows to the end customer amlessly. The same invoice has to be reported by the Supplier and the recipient to get actual ITC.

Notes

From – Sanjay K. Bulakh – Tax Consultants – Mobile No 94232 06273 / 72760 16273 e mail :