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With the introduction of GST, everybody is talking about the change it has brought in indirect tax regime in India and how it will revolutionize the taxation system in India. This change is not just on the external level for businesses, they will be impacted on a daily basis.
Everyday transactions of the business will be impacted, for example, the GST invoices will have to state the GSTIN No. of the business and they have to keep a record of their suppliers and customers in the same way. Businesses will be required to alter their Bookkeeping under GST.
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Many people might take it in a negative way as the compliance related to book-keeping will increase but one should not see it in a negative light only as this will bring transparency and simplification in the process of bookkeeping. It will be a difficult transition for taxpayers under GST who were registered under old Acts as they will have to make necessary entries relating to such transition which might prove to be a complicated task for certain taxpayers. Once this transition period ends, the accounting and recordkeeping procedure becomes quite easy and simplified.
Under GST, in order to make sure no tax is evaded, taxpayers are required to maintain all the minute records including invoices, bill of supply, debit note, credit note, refund vouchers, payment vouchers etc.
The following persons are required to maintain records:
Chapter VIII of Central Goods and Service Tax Act has provided provisions relating to bookkeeping under GST and maintenance of the records of an organization under the head “Accounts & Records”.
It states that clear records and accounts of the following are to be maintained:
Along with the maintenance of above-mentioned accounts, the taxpayer is also required to maintain records of the following:
Records are to be maintained at the place of business mentioned in the certificate of registration of GST. If more than one place of business is mentioned in the certificate, then such records are to be maintained in all such places.
If the taxpayer wishes to maintain such records and accounts in electronic form, then he can do that in the prescribed manner.
The following points must be noted:
The Act clearly specified GST audit requirements, it states that every taxpayer whose yearly turnover exceeds Two Crore Rupees is required to get his accounts audited by a chartered accountant or a cost accountant and shall submit a certified copy of reconciliation statement and audited annual accounts each in FORM GSTR-9C. He can make this submission either by himself on the common portal or through any facilitation centre notified by the Commissioner.
In case where the taxpayer fails to maintain proper records in respect of goods or services, then the proper officer will treat such unaccounted goods/services as if the taxpayer had supplied them.
It may be noted that the taxable person shall be required to pay tax liability calculated with penalty.
We hope this helped you have some clarity regarding bookkeeping under GST, for any other query related to GST contact Enterslice.
Read our article:
Problems of Fake GST Invoice and measures to address them
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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