Accounts and Records Under GST: All You Need To Know

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Accounts and Records under GST are crucial parts for the understanding of the GST Taxation system. As we all know, The evaluation under GST focuses primarily on taxpayers’ self-assessment. Therefore, each taxpayer is obliged to self-assess the taxes payable and provide a return for specific tax periods, i.e., the reporting period.

That’s why, In this article, we will explain all about Accounts and Records Under GST.

Who must maintain accounts and Records Under GST?

The following individuals are responsible for maintaining certain records-

  • Owner
  • The Warehouse operator, or godown operator, or any other faculty that is utilizing space for the warehousing of products
  • Every transporter

Now let us understand about Accounts and Records under GST separately.

What are the accounts which one must keep under GST?

One must keep following accounts under Goods and Service Tax (gst).

  • CGST a/c Input and CGST a/c Output
  • SGST a/c Output and SGST a/c Input
  • IGST a/c Output and Input
  • Electronic Cash Ledger on Governmental GST Portal to pay taxes

What are the records which one must keep under GST?

One must keep following records under Goods and Service Tax (GST).

  • Firstly, Data of Manufactured products
  • Secondly, Purchased and Sales Register
  • Furthermore, businesses should also maintain a stock register.
  • Input tax credit availed plus Output tax payable and paid
  • Lastly, Specific Businesses should also keep other records as notified by the government

What is e-ledger, and how to maintain them under GST?

Every business under GST must get three types of ledgers. It is important to note that these ledgers are generated and maintained electronically after GST Registration.

Electronic Cash Ledger: It is like an electronic wallet, and the taxpayer has to deposit money into this cash ledger.

Electronic Credit Ledger: As the name suggests, the credit ledger electronically reflects the input tax credit on purchases. In addition, it reflects the tax credit for all three categories, i.e., IGST, CGST & SGST. It is important to note that the taxpayer will be able to utilize this credit amount only for tax payment and not for any other purposes—for instance, interest, penalty, etc.

Electronic Liability Ledger: Contrary to Credit Ledger, the liability ledger shows the total tax liability after netting off for the particular month. In simple words, this ledger has details of GST liability. Furthermore, The ledger contains the total GST liability and how it has been paid – in cash or through credit.

Period for retention of accounts under GST

In accordance with the GST Act, each taxable registrant must keep the records and accounts for at least 72 months (6 years). The term is counted from the latest filing date for that year’s annual return.

Various outcomes of failing to maintain records properly

If the taxpayer fails to properly record the goods and services, the appropriate GST officer shall regard the goods and services unaccounted as if the taxpayer provides them. Consequently, For such non-reporting items, the officer shall calculate the tax indebtedness. In addition to the hefty penalty, the taxable person shall pay the tax due.

GST on Export of Goods & Services

If you want any other guidance related to GST Registration or GST Return filing, please feel free to talk to our business advisors at 8881-069-069.

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