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CA Final · Indirect Tax Laws · Accounts and Records; E-way Bill

Kaveri Auto Components Ltd, Pune, stores its accounts on an in-house server. Its server room was damaged in a flood, and the officer asks whether the company complied with the electronic record rules. Which standard under the CGST Rules, 2017 applies to back-up?

Proper electronic back-up of records must be maintained and preserved so that, if records are destroyed by accidents or natural causes such as a flood, the information can be restored within a reasonable period of time. The requirement has no turnover threshold.

  1. ABack-up must be maintained only if turnover exceeds a prescribed threshold
  2. BProper electronic back-up must be maintained so that, if records are destroyed by accidents or natural causes, the information can be restored within a reasonable period of timeCorrect
  3. CBack-up is needed only in the form of printed copies kept at the principal place of business
  4. DBack-up is needed only for records of the current month

Explanation

The rule requires proper electronic back-up, maintained and preserved so that, if records are destroyed by accidents or natural causes, the information can be restored within a reasonable period of time. Nothing in the text ties it to a turnover threshold, printed copies or the current month. A flood is an accident or natural cause, so the back-up must allow restoration.

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