Accounts and Records; E-way Bill: formula sheet

Key formulas

Accounts under Section 35(1)

Production + inward and outward supplies + stock + ITC availed + output tax payable and paid + other prescribed particulars

Kept at the principal place of business in the registration certificate, and at each additional place for that place's accounts.

Rule 56 stock account

Opening balance + receipts − supplies − goods lost, stolen, destroyed, written off or given as gift or free sample = closing balance

Covers raw materials, finished goods, scrap and wastage. Rule 56(4) applies to registered persons other than those paying tax under Section 10 (composition).

Rule 56 tax and ITC account

Tax payable (including reverse charge), tax collected and paid, input tax, ITC claimed, plus registers of invoices, credit notes, debit notes and challans

Do not carry over the composition exclusion of the stock account in Rule 56(4) to this account without reading the rule text. Rule 56(6) is framed for registered persons generally.

Rule 56 separate accounts

Advances received, paid and adjustments; works contract account; monthly production account (manufacturer); account of services supplied (service provider)

Each of these is a separate record. Do not merge them into the general ledger.

Rule 56 particulars to keep

Suppliers' names and addresses + customers' names and addresses + full address of premises where goods are stored, including in transit

Rule 56(17) requires you to maintain the full address of every premises where goods are stored, including goods in transit. Goods found at an undeclared place without valid documents expose you to inspection, search and seizure (Section 67), detention or confiscation (Sections 129 and 130) and demand proceedings (Sections 73 and 74). Rule 56(17)-(18) does not itself deem those goods to be supplied.

Retention period (Section 36)

Retain until 72 months from the due date of the annual return for that year

If you are a party to an appeal, revision or other proceeding, or under investigation for a Chapter XIX offence: retain for one year after final disposal of the appeal, revision, proceeding or investigation, or for the 72-month period, whichever is later.

Section 35(2) persons

Owner or operator of godown or warehouse, and every transporter: records of consignor, consignee and other relevant details

Applies irrespective of registration.

Form of records

Electronic form allowed; manual books must have numbered pages; entries are not erased or overwritten

Incorrect entries other than clerical ones are scored out under attestation, then the correct entry is made. Electronic records need a log of edits and deletions.

Authentication

Electronic record + digital signature of the person required to authenticate it (IT Act, 2000)

A plain typed name or an unsigned printout does not meet this condition.

Unique login ID

Every login to generate or maintain records = one unique ID, used to identify who generated or maintained the record

Shared logins break traceability.

Safeguards and backup

Proper safeguards against loss or unauthorised access + proper electronic backup of records

Backup is a compliance condition, not just good practice.

Production on demand

Proper officer asks → produce relevant records, duly authenticated, in hard copy or electronic form, with the means to verify them

Giving the data without the means to verify it is incomplete compliance.

Legal base

Section 35 CGST Act allows electronic records; Rule 57 sets the conditions

Cite both in answers: the section permits, the rule regulates.

Accounts under Section 35

Registered person keeps at principal place: production or manufacture + inward and outward supplies + stock + ITC availed + output tax payable and paid + prescribed particulars

Applies to every registered person. Additional places of business should be declared in the registration.

Transporter and godown owner records

Duty under Section 35(2) applies irrespective of registration. Record the consigner, consignee and other details of the goods handled or stored

Section 35(2) creates the duty. The detailed record contents are in Rule 58, not in the section text alone. Under the Rule, godown owners also record depositor details, the nature and quantity of goods, the period of storage and their movement. Unregistered transporters and godown owners must enrol on the common portal (Section 35(2) read with Rule 58).

Job work records of the principal

Challans for goods sent and received + goods moved between job workers + stock with job worker

Link with Section 143. Goods sent under challan are not a supply, but the trail must be complete.

Retention period (Section 36)

72 months from the due date of the annual return for the year of the accounts

If litigation is pending, keep until one year after the final disposal of the appeal or proceeding.

Reconciliation statement

Self-certified reconciliation statement reconciling the annual return with the financial statements (audited, where audit is required under any other law), filed above the notified turnover limit

No CA certification is needed now. The limit is notified and has been ₹5 crore (reconciliation statement in GSTR-9C for turnover above ₹5 crore). Check that it has not changed in your study material.

Audit by tax authorities (Section 65)

Notice at least 15 working days before. Complete within 3 months of commencement, extendable by up to 6 months

Conducted at the premises or the office, by an officer authorised by the Commissioner, by general or specific order, under Section 65(1).

Special audit (Section 66)

Officer not below the rank of Assistant Commissioner forms the opinion, at any stage of scrutiny, inquiry, investigation or other proceedings, that value is not correctly declared or credit is beyond normal limits + Commissioner's prior approval + nominated CA or cost accountant

Report in 90 days, extendable by 90 days on application. The cost is borne by the department.

Basic trigger

Movement of goods in a vehicle + consignment value > ₹50,000 + (supply OR non-supply reason OR inward supply from unregistered person) → e-way bill required

Value exactly equal to ₹50,000 does not cross the limit. The test is 'exceeds'.

Consignment value

Consignment value = value of goods as per invoice, bill of supply or delivery challan + CGST + SGST/UTGST + IGST + cess charged

Exclude the value of exempt supplies when one invoice covers taxable and exempt goods. Also exclude tax payable under reverse charge.

Who generates

Registered person by whom or on whose behalf goods are caused to be transported (consignor or consignee); else transporter; recipient for inward supply from unregistered person

Whether the consignor or consignee generates it depends on who causes the movement. An unregistered person may generate it voluntarily. A transporter generates it on the basis of Part A details.

Two parts of the form

Part A = details of goods, supplier, recipient, invoice; Part B = vehicle number or transport details

Part A can be filed first. Part B is needed when the goods actually move.

Documents with the conveyance

Invoice / bill of supply / delivery challan / bill of entry + e-way bill (or its number, including RFID mapping)

The person in charge of the conveyance must carry them.

Validity of regular cargo

Days = distance ÷ 200, rounded up to the next whole number

Up to 200 km = 1 day. Each further 200 km or part = 1 more day. 201 km = 2 days.

Validity of over dimensional cargo

Days = distance ÷ 20, rounded up to the next whole number

Up to 20 km = 1 day. Each further 20 km or part = 1 more day.

Extension window

Extend within 8 hours before or after expiry of validity

Done by the person in charge of the conveyance while the goods are in transit, usually the transporter (or the generator, if the goods are not handed to a transporter), stating the reason (for example breakdown or transshipment delay) and the consignment's present location.

Cancellation window

Cancel within 24 hours of generation

Only if the goods have not been verified in transit. Cancellation is done by the person who generated the bill.

Recipient response (portal facility)

The recipient can accept or reject on the portal within 72 hours of the details being made available to the recipient on the portal, or the time of delivery, whichever is earlier

This is a facility on the e-way bill portal. It is separate from cancellation and does not extend the 24-hour cancellation window. If the recipient does not respond in time, the details are treated as accepted on the portal.

Part A and Part B

Part A = goods and parties; Part B = vehicle or transport document

Part B is updated whenever the conveyance changes.

Consolidated e-way bill

Several consignments in one conveyance, FORM GST EWB-02

Generated by the transporter before movement. Each consignment must already have its own e-way bill.

Penalty: taxable goods, owner comes forward

Penalty = 200% × tax payable on the goods

Tax is also payable. Release amount = tax + penalty.

Penalty: exempt goods, owner comes forward

Penalty = lower of (2% × value of goods) and ₹25,000

No tax is payable on exempt goods, so only this penalty is paid.

Penalty: taxable goods, owner does not come forward

Penalty = higher of (50% × value of goods) and (200% × tax payable)

Tax is also payable. Note it is 'higher of', unlike the exempt-goods case.

Penalty: exempt goods, owner does not come forward

Penalty = lower of (5% × value of goods) and ₹25,000

Here it is 'lower of'.

Time limits

Part A of EWB-03: 24 hours | Part B: 3 days | Order after notice: 7 days from service of the Section 129(3) notice | Payment before Section 130 proceedings: 15 days from receipt of the copy of the Section 129(3) order

Learn these four numbers together. Questions often test them.

Physical verification rule

Only with specific information of evasion + written approval of Commissioner or authorised officer

Once verified in a State or Union territory, no repeat verification there without new specific information.

Release alternative

Release on payment of tax and penalty, or on furnishing security equal to the amount payable

Security is by way of a bond and a bank guarantee, as prescribed.

Quick revision

• Accounts and records are kept at the principal place of business, and also at the additional places of business as the law requires.
• Records cover production, inward and outward supplies, stock, ITC availed, output tax payable and paid, and prescribed particulars.
• Under Section 36 of the CGST Act, records are retained for 72 months from the due date of the annual return for the relevant year. If the person is a party to an appeal, revision or any other proceedings, or an investigation is pending, the records must be kept for one year after the final disposal of those proceedings, or for the 72 months, whichever is later.
• Electronic records must be maintained in a form that is secure, retrievable and, where required, authenticated.
• Agents, transporters and owners or operators of godowns and warehouses have their own special record obligations.
• An e-way bill is required when the consignment value exceeds ₹50,000. This value includes tax. Exemptions (for example, specified exempt goods) and state-specific thresholds for intra-state movement apply.
• Part A of the e-way bill holds invoice-level details, and Part B holds vehicle or transport details.
• Validity of an e-way bill for regular cargo is one day for every 100 km or part thereof. For over-dimensional cargo it is one day for every 20 km or part thereof.
• An e-way bill can be cancelled within 24 hours of generation if goods are not moved or details are wrong, and not after verification in transit.
• The person in charge of the conveyance must carry the invoice or other prescribed document and the e-way bill.
• Under Section 129 of the CGST Act, goods in transit or in storage without the right documents can be detained. For taxable goods, if the owner comes forward, the penalty is 200% of the tax payable. If the owner does not come forward, the penalty is 50% of the value of goods reduced by the tax amount paid on them. For exempt goods, if the owner comes forward, the penalty is 2% of the value or ₹25,000, whichever is less. If the owner does not come forward, it is 5% of the value or ₹25,000, whichever is less.

Common mistakes

• Counting the 72 months from the end of the financial year or from the date of filing the return. Fix: Section 36 counts from the due date of furnishing the annual return for that year, not the financial year-end or the actual filing date.
• Writing that retention is only 72 months even when an appeal is pending. Fix: A person who is a party to an appeal, revision or other proceeding, or under investigation for an offence under Chapter XIX, must retain the books for one year after final disposal of the appeal, revision, proceeding or investigation, or for the 72-month period, whichever is later.
• Thinking GST records must be kept in paper form at the business premises. Fix: Remember that electronic form is permitted, subject to Rule 57 conditions.
• Treating a scanned signature or typed name as a digital signature. Fix: Link the digital signature to the Information Technology Act, 2000 and say the record must carry it.
• Saying a CA audit is compulsory above a turnover limit under Section 35. Fix: State that it was omitted by the Finance Act, 2021 (effective 1 August 2021), with the self-certified reconciliation applying from 2020-21. Mention the reconciliation statement instead, and that Section 66 special audit can still be ordered.
• Saying an unregistered transporter or godown owner has no record duty. Fix: Write that the duty applies irrespective of registration.
• Testing the limit on the value before tax. Fix: Add CGST, SGST, IGST and cess charged first. Then compare with ₹50,000.
• Thinking an e-way bill is needed only for a sale. Fix: Remember the three triggers: supply, non-supply reasons such as returns and job work, and inward supply from an unregistered person.
• Using 100 km per day for regular cargo, or not rounding up. Fix: Use 200 km per day for regular cargo and 20 km for over dimensional cargo. Always round any fraction up.
• Saying the e-way bill can be cancelled at any time before delivery. Fix: Cancellation needs both conditions: within 24 hours of generation and no verification in transit. After that, the bill cannot be cancelled and is left to expire.

Exam tips

• Examiners test the retention period with dates. Always compute from the annual return due date, show the 72-month date, then compare it with the one-year-after-disposal date.
• In case scenarios, check whether the person is a composition taxpayer before listing the stock account under Rule 56(4).
• Keep the Section 35, Rule 56 and Section 36 roles separate: what, how in detail, and how long. Quote section or rule numbers only for those three, plus Sections 67, 129, 130, 73 and 74 for enforcement consequences.
• Look for traps in the facts: an undeclared storage place, an additional place of business, a transporter or warehouse owner, or a pending appeal.
• In descriptive answers, write the rule first, then apply it to the facts, then conclude. Do not just list records.
• Case-scenario MCQs usually plant one defect among otherwise correct facts. Run the Sign, ID, Safe, Show scan and find it.
• In written answers, cite Section 35 of the CGST Act and Rule 57 together, and list the conditions as short bullets.
• Always mention the Information Technology Act, 2000 when you discuss digital signature.