CA Intermediate · Taxation
Accounts and Records (GST) for CA Intermediate Taxation
Accounts and Records is the GST chapter on what books a registered person must keep under Section 35 CGST, where to keep them, which persons keep special records, and how long to retain them under Section 36. Solve questions by naming the provision, applying the facts, and stating the conclusion.
What this chapter covers
This chapter sits in Paper 3 Section B (GST), under the CGST Act, 2017. It tells you what a registered person must record: production or manufacture, inward and outward supplies, stock, input tax credit availed, output tax payable and paid, and other prescribed particulars. It also covers where the records are kept, which is the principal place of business, and the accounts for each additional place of business.
The chapter then moves to persons with extra duties. Under the Act itself, owners or operators of godowns and warehouses, and transporters, must keep records of the goods they handle, whether or not they are registered. The Commissioner can also notify other classes of persons who must keep records. Separately, the CGST Rules (Rule 56) require additional details from specific persons such as works contractors, agents and manufacturers. Finally, the chapter covers how long records must be kept and in what form, including electronic records.
The chapter links to several other GST chapters. Registration decides who must keep records. Input tax credit, invoicing, and returns all depend on the books being accurate. Assessment and audit by tax authorities rely on the same records. If you know this chapter well, you can answer those chapters' questions on compliance more confidently.
This is a short, rule-based chapter, and that makes it good value for MCQs and short written answers. Questions usually test one exact condition: who must keep records, where, for how long, or in what form. A student who learns the conditions precisely can score full marks with little effort. The same facts also help in compliance-based case studies in other GST chapters, where one wrong assumption about records can lose step marks.
Accounts and Records: topics in the order to study them
- 1Accounts and Records under Section 35 CGSTThis is the base rule: what a registered person must record and where. Everything else builds on it.
- 2Special Records for Specific PersonsOnce you know the general rule, learn who has extra or different duties. Keep two groups apart: godown owners and transporters (duty under the Act), and agents, works contractors and manufacturers (additional details under the Rules).
- 3Retention Period and Electronic RecordsNow learn how long records are kept under Section 36 and how they may be maintained, which completes the compliance picture.
- 4Audit and Professional Compliance AspectsStudy this last because it ties records to departmental audit, reconciliation and the professional's role, and it needs the earlier rules.
How to prepare Accounts and Records
This chapter is mostly about exact conditions. Prepare it by building a clear list of who, what, where and how long, and then testing it with short questions.
- Read Section 35 in plain words and list the six heads of records: production or manufacture, inward and outward supplies, stock, ITC availed, output tax payable and paid, and other prescribed particulars.
- Note the place rule: records are kept at the principal place of business shown in the registration certificate, and accounts of each additional place are kept at that place.
- Make a one-page table in your notes of special persons. Put godown owners and transporters in one group (duty under the Act, whether or not registered) and agents, works contractors and manufacturers in another (extra records under the CGST Rules). Learn it by person, not by rule number.
- Learn the Section 36 retention rule: keep records for 72 months from the due date of the annual return for the relevant year. If appeal, revision or other proceedings are pending, keep them for one year after final disposal of the proceeding, or for the 72 months, whichever is later.
- Read what the Act and Rules say about electronic records, and note that records may be kept manually or electronically.
- Solve past questions and ICAI practice questions. For written answers, use provision, facts, conclusion. For MCQs, check each option against the exact condition in the rule.
- Revise the audit aspects last. Keep departmental audit and special audit separate from the annual return reconciliation, and do not mix them up.
Common mistakes in Accounts and Records
Saying only registered persons have to keep records under the chapter.
Fix: Remember that godown or warehouse owners or operators and transporters keep records irrespective of registration.
Writing the wrong place for keeping accounts, such as the head office or the owner's home.
Fix: Write that accounts are kept at the principal place of business shown in the registration certificate, and accounts of each other place are kept at that place.
Miscounting the retention period, for example saying six years from the end of the financial year.
Fix: Always write: 72 months from the due date of furnishing the annual return for the year of the accounts. For pending proceedings, add: or one year after final disposal, whichever is later.
Mixing up departmental audit, special audit and the reconciliation statement filed with the annual return.
Fix: Keep a three-line note: Section 65 audit by tax authorities, Section 66 special audit on direction, and the reconciliation statement as part of annual return compliance.
Giving a general answer in a case study without the provision and facts.
Fix: State the provision, apply the facts given in the question, and end with a clear conclusion.
Last-day revision: Accounts and Records
- Section 35 applies to every registered person: keep a true and correct account.
- Six heads: production or manufacture, inward and outward supplies, stock, ITC availed, output tax payable and paid, other prescribed particulars.
- Keep accounts at the principal place of business shown in the registration certificate.
- With more than one place of business, keep accounts for each place at that place.
- Owners or operators of godowns or warehouses and transporters must keep records of goods handled, whether registered or not. This duty comes from the Act itself.
- The Commissioner may notify other classes of persons who must keep records.
- Agents, works contractors and manufacturers keep additional details as Rule 56 of the CGST Rules requires. This is separate from the godown and transporter duty.
- Retention under Section 36: 72 months from the due date of the annual return for that year.
- If appeal, revision or other proceedings are pending, keep records for one year after final disposal of the proceeding, or 72 months from the due date of the annual return, whichever is later.
- Records may be kept manually or electronically. Electronic records should be secure and retrievable.
- Departmental audit comes under Section 65 and special audit under Section 66.
- Failure to keep records can lead to penalty and can weaken an ITC claim.
Accounts and Records practice questions
- Gupta Steel Ltd. has an annual aggregate turnover of Rs 4 crore and is a registered person. Which of the following is a statement about the …
- Ravi Enterprises, a registered person, is subject to audit by the tax authorities. During a stock-taking on its premises, the proper officer…
- Sharma Traders, a registered person in Jaipur, maintains its books of account at its principal place of business and also has an additional …
- Rao Pharma Ltd., a registered person, is a manufacturer. Which of the following is a record that, under Rule 56 of the CGST Rules, 2017, a r…
- Gupta Steels, a registered person in Raipur, has an aggregate turnover of Rs 4 crore and is a regular taxpayer. It manufactures goods. Which…
- Gupta Wholesale, a registered person, is a trader of goods. Which of the following details must it necessarily include in its books of accou…
- Kavita Enterprises is a registered person with a turnover of Rs 3 crore in every year so far. Which of the following must be included among …
- Anand Constructions, a registered person, is a works contractor and is also a person liable to maintain accounts under CGST Rules. Which of …
Accounts and Records in other exams
The same ground in other exams, if you are preparing for more than one or want another angle on it.
Accounts and Records: frequently asked questions
What does Section 35 of the CGST Act require?
It requires every registered person to keep a true and correct account of production or manufacture, inward and outward supplies, stock, ITC availed, output tax payable and paid, and other prescribed particulars. These are kept at the principal place of business, with each additional place keeping its own accounts.
How long must GST records be kept?
Under Section 36, records must be kept for 72 months from the due date of furnishing the annual return for the year they relate to. If an appeal, revision or other proceeding is pending, keep them for one year after its final disposal or for the 72 months, whichever is later.
Do transporters and warehouse owners need GST registration to keep records?
No. Owners or operators of godowns or warehouses and transporters must keep records of the goods they handle irrespective of registration. These records cover the consigner, the consignee and other relevant details.
Can GST records be kept electronically?
Yes. Records may be kept manually or electronically. In an answer, mention that electronic records must remain secure and available when the department asks for them.