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CA Intermediate · Taxation · Accounts and Records

Sunrise Traders, a registered person in Indore, has its principal place of business in Madhya Pradesh and also keeps stock in a rented godown in Dewas, a different location in the same State, from which it makes no sales. Under the CGST Act, 2017 and the Rules, where must it keep its books of account and other records?

Records must be kept at the principal place of business and at each additional place of business shown in the registration. Since the Dewas godown stores stock, it must be declared as an additional place and its accounts kept there, not merely at the Indore principal place.

  1. AOnly at the principal place of business, and the godown need not be mentioned in the registration
  2. BAt the principal place of business and at every additional place of business mentioned in the registration, with the godown declared as an additional placeCorrect
  3. COnly at the godown, since the stock is kept there
  4. DAt the residence of the proprietor, as no place of business is required to be specified

Explanation

Section 35 requires every registered person to keep and maintain at his principal place of business, as mentioned in the registration certificate, a true and correct account of goods or services. If there is more than one place of business, the accounts relating to each place must be kept at the respective places and declared in the registration. The godown is a place where goods are stored, so it must be declared as an additional place of business and its records kept there. Option A is wrong because the godown must be declared.

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