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CA Intermediate · Taxation · Accounts and Records

Nair Agro, a registered person with three places of business in Kerala, runs a warehouse where goods are stored. In the books, stock register entries at the warehouse are made on the day of receipt. A GST officer found that the warehouse was not declared in the registration and goods worth ₹6,00,000 were stored there. Which is the correct consequence under the accounts and records provisions?

The storage at an undeclared warehouse is a non-compliance, because every place where goods are stored must be shown in the registration as a place of business and covered by accounts. The goods can be treated as unaccounted, inviting action against the person.

  1. ANo consequence because stock registers exist
  2. BThe goods are liable to be treated as not accounted for in the books and the person is liable to action, since every place where goods are stored must be declared as an additional place of businessCorrect
  3. CThe warehouse is automatically deemed a principal place of business and no penalty applies
  4. DOnly the transporter is liable

Explanation

Every registered person must declare each place where goods are stored as a place of business and maintain records of stock there (section 35). An undeclared warehouse means non-compliance, and goods may be treated as not accounted for, attracting action under the Act. Existence of registers does not cure non-declaration.

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