Accounts and Records under GST in India: FAQs

Who should maintain records and accounts under GST?

Records and accounts under GST are maintained by the owner or operator of a warehouse or other place of business, and by the transporter of goods and services.

What are the rules for maintaining records and accounts?

• Under the GST Laws, records and accounts should be maintained at the primary place of business.

• For branches of the primary office, records and accounts must be maintained separately at each place of business.

• Businesses can maintain records and accounts in electronic format, but they are required to have proper back-ups. The business must also be able to produce the records or accounts on demand.

• Businesses whose turnover exceeds a prescribed limit are required to have their accounts audited. For businesses who have opted for the presumptive income scheme, the limit is Rs. 2 crore. For businesses who have not opted for this scheme, the limit is Rs. 1 crore. The presumptive income scheme is meant to help SMEs get rid of the hassle of maintaining accounts and having them audited. 

What records and accounts need to be maintained under GST? 

The records to be maintained under GST are:

• Production or manufacture of goods

• Sales and purchases of goods and services

• Stock of goods

• Input tax credit availed

• Output tax payable

• Output tax paid

• Other particulars which may be prescribed

The accounts to be maintained under GST are:

• Input and output CGST accounts

• Input and output SGST accounts

• Input and output IGST accounts

• Electronic Cash Ledger

What are electronic ledgers and what types are there?

E-ledgers, or electronic ledgers, are an electronic form of a passbook under GST. Taxpayers are given access to 3 types of ledgers on registration. 

• The E-cash ledger acts as an e-wallet and can be used by the taxpayer to make payments. The E-cash ledger can be recharged online if required.

• The E-credit ledger holds the input tax credit availed from the taxpayer’s monthly returns. This credit can be of 3 types (CGST, SGST and IGST) and can only be used to pay taxes.

• The E-liability ledger holds the taxpayer’s total tax liability for a given month. This is visible on the taxpayer’s GST dashboard by default.

What is the period for record retention under GST?

Every taxable person is required to retain their accounts and records for a period of at least 72 months or 6 years. This period starts from the last date of filing the relevant annual return.

What are the consequences of not maintaining proper records and accounts?

Taxpayers are required to maintain proper records and accounts of their businesses with respect to goods and services. If they do not, tax officials can determine the tax liability on the unaccounted supply. The taxpayer will then have to pay this tax liability along with a penalty fine.