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CMA Final · Indirect Tax Laws and Practice · Accounts and Records

A registered person keeps accounts in electronic form. Under Rule 57 of the CGST Rules, 2017, which obligation is correctly stated?

The person must maintain proper electronic back-up of records so the information can be restored within a reasonable time if destroyed by accident or natural causes. Production on demand may be in hard copy or any electronically readable format, and file passwords and code explanations must be provided.

  1. ARecords need only be produced in hard copy, never in electronic format
  2. BProper electronic back-up must be maintained so information can be restored within a reasonable time after accidental or natural destructionCorrect
  3. CPasswords of files need not be disclosed, only a sample print
  4. DBack-up is required only when turnover exceeds a prescribed limit

Explanation

Rule 57(1) requires proper electronic back-up so records can be restored within a reasonable time after destruction by accidents or natural causes. Rule 57(2) allows production in hard copy or electronically readable format. Rule 57(3) requires details of files, passwords and code explanations on demand, so the password option is wrong.

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