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All About Accounts and Records Under GST

Under GST all the registered taxpayer must maintain accounts and records at his or her principal place of business.

1) Who needs to maintain accounts and records under GST?

Here is the list of the person who needs to maintain the accounts and records under GST:

(i) Business Owner

(ii) Warehouse operator or godown owner or any other place that is used for goods storage

(iii) Transporters

It shall be noted that the taxpayer whose turnover during any previous financial year exceeds 2 Crore INR needs to get his account audited by the CA (Chartered Accountant), CWA (Cost and Work Accountant).

2) What records do the taxpayer needs to maintain under GST?

Every registered person must maintain records of:

Production or Manufacture Account

(i) Purchase (inward supply)

(ii) Sales (outward supply)

(iii) Stock of Goods

(iv) ITC (Input Tax Credit) Claimed

(v) Output tax liability payable or paid; and

(vi) Other things as may be prescribed under GST

3) Accounts that needs to be maintained under GST

Apart from the purchase account, sales account and trading account the taxpayer needs to maintain the following Account:

Transaction Type GST Type Accounts
CGST Input CGST A/C
Intra-State Output CGST A/C
SGST or UTGST Input SGST A/C
Output SGST A/C
Inter-State IGST Input IGST A/C
Output IGST A/C

However, it shall be noted that e-Cash Ledger also needs to be maintained by the taxpayer on the GST portal to pay the GST applicable.

4) What types of ledger needs to be maintained by the taxpayer?

Every registered taxable person needs to maintain the following types of ledger under GST and they are:

(i) e-Cash Ledger

Electronic cash ledger under GST is just like an e-wallet for the taxpayer.  He/She needs to deposit the money in this ledger like an e-wallet. The money deposited in this e-Cash ledger will be utilized for certain payments as may be specified.

(ii) e-Credit Ledger

The electronic credit ledger under GST is a type of a ledger that will reflect all the ITC (Input Tax Credit) on the purchases. The ITC will be bifurcated into three different categories IGST for inter-state purchases and SGST/UTGST, and CGST for the intra-state purchases. It shall be kept in mind that the amount reflected in this ledger can be utilized by the taxpayer for the tax payment only and not for interest, penalty payments.

(iii) e-Liability Ledger

The electronic liability ledger under GST is a type of a ledger that will indicate the total tax liability of the taxpayer during the particular tax period. It shall be noted the e-Liability ledger will get auto-populated.

5) For how many years or months do a taxpayer needs to keep the maintained accounts or records?

Under the GST Act, every taxpayer needs to keep the maintained accounts or records for not less than 72 months (6 years). The window period of 72 months will be calculated from the last date of filing of Annual GSTR.

Let us understand this with an example:

If the taxpayer has filed the annual GSTR on 31st December 2019. Then in such a case, the taxpayer needs to keep the records and accounts of 2018-2019 till 31st December 2025.

In case if the registered taxable person is under any legal proceeding before any appellate authority, then he/she needs to maintain the books of account for at least one year after the order of such legal proceedings has been passed.

6) What are the consequences of not maintaining Proper Records and Accounts?

In case if the registered taxable person fails to maintain the proper records then in such a case the proper officer authorized by the GST Commissioner or any other officer of the same rank has the right to ascertain the tax liability on such non recorded goods or/and services. And taxpayer will be liable to pay such amount along with the penalty as may be prescribed.