Indirect Tax Laws and Practice · Accounts and Records

Accounts and Records under Section 35 of CGST Act

Updated 11 October 2026 · Fact-checked

Section 35 requires every registered person to keep a true and correct account of production, inward and outward supplies, stock, input tax credit availed, and output tax payable and paid. You keep it at the principal place of business, and the accounts of each additional place at that place. Electronic form is allowed.

Understand Accounts and Records under Section 35 of CGST Act

GST is a self-assessed tax. The officer cannot check your tax unless your books show what you made, bought, sold, held and paid. Section 35 is the base provision that makes you keep those books.

Section 35(1) lists what a registered person must account for: (a) production or manufacture of goods; (b) inward and outward supply of goods or services or both; (c) stock of goods; (d) input tax credit availed; (e) output tax payable and paid; and (f) such other particulars as may be prescribed. The accounts must be true and correct.

The place matters. The books are kept at the principal place of business shown in the certificate of registration. If the certificate shows more than one place of business, the accounts of each place are kept at that place. You may keep the accounts and particulars in electronic form, in the manner prescribed.

Section 35 also reaches beyond the registered person. Under sub-section (2), every owner or operator of a warehouse, godown or other storage place, and every transporter, must keep records of the consigner, consignee and other relevant details of the goods. This applies whether or not that person is registered. The Commissioner can notify a class of taxable persons to keep additional accounts (sub-section 3), or permit a class that cannot comply to keep accounts in a prescribed manner (sub-section 4).

There is a penal link. If you fail to account for goods or services as required by sub-section (1), the proper officer determines the tax on the unaccounted goods or services as if you had supplied them. Section 73, section 74 or section 74A applies, as the case may be. This is subject to section 17(5)(h). The detailed list of registers is in Rule 56, which you study alongside this topic.

Key rules to remember

Particulars under Section 35(1): Production + Inward/outward supplies + Stock + ITC availed + Output tax payable and paid + Other prescribed particulars; Six heads in clauses (a) to (f). Accounts must be true and correct.
Place of keeping accounts: Principal place of business; each additional place of business keeps its own accounts; Per the first proviso to section 35(1), where the certificate of registration shows more than one place.
Electronic form: Accounts may be kept in electronic form in the prescribed manner; Second proviso to section 35(1).
Warehouse and transporter records: Section 35(2): records of consigner, consignee and other relevant details of goods; Applies whether or not registered. Rule 58 gives the procedure.
Failure to account: Tax on unaccounted goods or services is determined as if supplied by the person; Section 35(6). Proper officer applies section 73, 74 or 74A.

How to solve Accounts and Records under Section 35 of CGST Act questions

Use this method for any question on accounts and records under section 35.

1Identify who the person is: a registered person, a warehouse owner or operator, or a transporter. Sub-section (2) covers the last two even if unregistered.
2List the facts that must be accounted for: production, inward and outward supplies, stock, ITC availed, output tax payable and paid.
3Check the place. Name the principal place of business and any additional place shown in the certificate of registration, and state where each set of accounts is kept.
4Check the form. Say that electronic records are allowed in the prescribed manner.
5Look for special classes. Check whether the Commissioner has notified additional accounts (sub-section 3) or permitted a different manner (sub-section 4).
6Check for a failure. If goods or services are not accounted for, apply section 35(6): tax is determined as if supplied, under section 73, 74 or 74A.
7Write the conclusion in one line, tied to the facts of the case.

Quickest way: Six heads, place, form, failure

When to use it: For MCQs and short-answer questions where you must decide quickly what the registered person must keep and where.

Recall the six heads: production, supplies, stock, ITC, output tax, other particulars.
Ask where: principal place, plus each additional place for its own accounts.
Ask who: any registered person, plus warehouse keepers and transporters under sub-section (2).
Ask what if not kept: tax on unaccounted supplies, as if supplied by the person.

Common mistakes in Accounts and Records under Section 35 of CGST Act

Saying all accounts of all places can be kept only at the head office.
Students remember only 'principal place of business'.
Fix: Add the first proviso: where more than one place is in the certificate, the accounts of each place are kept at that place.
Leaving out input tax credit availed or output tax payable and paid from the list.
Students focus on stock and sales records.
Fix: Learn the six heads (a) to (f) as a list. ITC availed and output tax payable and paid are separate heads.
Saying warehouse owners and transporters need to keep records only if registered.
Section 35(1) is read as the whole section.
Fix: Sub-section (2) says 'irrespective of whether he is a registered person or not'.
Treating electronic records as not allowed or as needing prior permission.
Students assume books mean paper books.
Fix: The second proviso permits electronic form in the prescribed manner. No separate permission is mentioned in the section.
Applying section 35(5) in an answer.
Older notes still show it.
Fix: Sub-section (5) was omitted by Act 13 of 2021 w.e.f. 1-8-2021. Do not cite it.
Saying the penalty for unaccounted goods is a fixed amount without reference to the tax.
Confusing with penalty provisions.
Fix: Under section 35(6) the officer determines the tax on the unaccounted supply as if you had supplied it, using section 73, 74 or 74A.

Worked examples

Example 1

Shree Textiles Pvt. Ltd., Surat, is registered under GST. Its certificate shows its head office in Surat as the principal place of business and a godown-cum-sales office in Indore as an additional place of business. The accountant proposes to keep all books only in Surat and to keep the records in a pen-drive-based electronic system. Advise on the position under section 35.

Show the solution

The company is a registered person, so section 35(1) applies. It must keep a true and correct account of production, inward and outward supplies, stock, ITC availed, output tax payable and paid, and other prescribed particulars.
Place: the books are kept at the principal place of business, Surat. Because the certificate shows more than one place of business, the first proviso requires the accounts relating to Indore to be kept at Indore.
Form: the second proviso allows accounts and particulars to be kept in electronic form in the prescribed manner. Electronic records are therefore allowed, but they must follow the manner prescribed in the Rules.
Conclusion: keeping everything only at Surat does not satisfy the proviso.

Answer: Electronic records are permitted in the prescribed manner. But the proposal to keep all books only in Surat is wrong: the Indore accounts must be kept at Indore, and the Surat accounts at the principal place of business.

Example 2

During a visit, the proper officer finds that Rohan Traders, a registered person, has sold goods which were never entered in its stock or supply accounts. Under which provision is tax determined, and on what basis?

Show the solution

Section 35(1) requires a true and correct account of inward and outward supplies and of stock. The goods were not accounted for.
Section 35(6) applies where the registered person fails to account for goods or services or both in accordance with sub-section (1). It is subject to section 17(5)(h).
The proper officer determines the tax payable on the goods not accounted for, as if the goods had been supplied by Rohan Traders.
Section 73, section 74 or section 74A, as the case may be, applies mutatis mutandis for determining that tax. Which one applies depends on the facts, such as whether there is fraud or suppression.

Answer: The proper officer determines the tax on the unaccounted goods as if Rohan Traders had supplied them, under section 35(6), using the procedure of section 73, 74 or 74A as applicable.

Exam tips

MCQs often test the six heads or the place rule. Memorise clauses (a) to (f) in order.
Remember the extra points: sub-section (2) applies to unregistered warehouse keepers and transporters, and sub-section (6) gives the tax consequence.
In case questions, state the place of keeping accounts using the certificate of registration, then conclude.
Pair this topic with Rule 56. Cite the Act for the duty and the Rule for the detailed registers, without mixing them.
Do not cite sub-section (5). It has been omitted.

Practice questions from Accounts and Records

Accounts and Records under Section 35 of CGST Act 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 under Section 35 of CGST Act: frequently asked questions

Where must a registered person keep accounts under section 35 of the CGST Act?

At the principal place of business shown in the certificate of registration. If the certificate shows more than one place of business, the accounts of each place are kept at that place.

Can accounts under section 35 be kept electronically?

Yes. The second proviso to section 35(1) allows the registered person to keep accounts and other particulars in electronic form in the manner prescribed.

Does section 35 apply to transporters and warehouse owners who are not registered?

Yes. Section 35(2) applies to every owner or operator of a warehouse, godown or other storage place and every transporter, whether registered or not. They keep records of consigner, consignee and other relevant details of the goods.

What happens if goods are not accounted for?

Under section 35(6), the proper officer determines the tax on those goods as if the registered person had supplied them. Section 73, 74 or 74A applies as the case may be.