Section 35 of the Central Goods and Services Tax Act, 2017 deals with accounts and other records that registered persons are required to maintain under the GST law. Proper maintenance of books, invoices, stock records, input tax credit details, tax payable and other prescribed information is an important part of GST compliance.
The purpose of Section 35 is to ensure that the activities of a registered person can be properly verified from reliable books and records. These records help establish the details of purchases, sales, stock, input tax credit, output tax liability and tax payments. They can also become important during scrutiny, assessment, audit, inspection, investigation or other proceedings under GST.
Section 35 is supported by the detailed requirements contained in the Accounts and Records Rules, particularly Rule 56 onwards. The rules prescribe additional records relating to imports, exports, reverse-charge supplies, stock, advances, tax liability, invoices, suppliers, customers, storage locations, manufacturing, services, works contracts and electronic records.
What is Section 35 of the CGST Act?
Section 35 is titled “Accounts and other records.”
The provision requires every registered person to keep and maintain a true and correct account at the principal place of business of specified business and GST-related activities.
The main accounts specifically mentioned in Section 35(1) relate to:
- production or manufacture of goods;
- inward and outward supply of goods or services or both;
- stock of goods;
- input tax credit availed;
- output tax payable and paid; and
- other particulars prescribed under the GST Rules.
Where a registered person has more than one place of business mentioned in the registration certificate, the accounts relating to each place of business are required to be kept at the respective places of business.
The law also permits accounts and other particulars to be maintained electronically in the prescribed manner.
Why is Section 35 Important?
GST is based heavily on transaction-level documentation and reporting. A registered person therefore needs to be able to demonstrate how the figures reported in GST returns have been arrived at.
For example, if a business reports:
- ₹50 lakh of taxable outward supplies;
- ₹8 lakh of input tax credit;
- ₹9 lakh of output tax; and
- ₹1 lakh of net tax payable,
its books and supporting records should provide a proper trail for these figures.
Section 35 provides the statutory foundation for maintaining these records.
Proper records can help a taxpayer:
- support GST return figures;
- establish the quantity and value of stock;
- substantiate input tax credit;
- reconcile purchases and sales;
- establish tax liability;
- respond to departmental queries;
- support claims made during GST proceedings; and
- demonstrate compliance with GST requirements.
Who is Required to Maintain Accounts Under Section 35?
The primary obligation under Section 35(1) applies to every registered person.
Therefore, a registered taxpayer is required to maintain the accounts and records specified under the Act and Rules.
The detailed nature of the records may differ depending on the business.
For example:
- a manufacturer may need production records;
- a trader needs appropriate stock and purchase/sales records;
- a service provider needs records relating to services supplied and inputs used;
- a works contractor has additional project-wise record requirements;
- a warehouse operator has storage-related records; and
- a transporter has records concerning goods transported or stored in transit.
The Rules therefore supplement the general requirements of Section 35.
Section 35(1) – Basic Accounts to Be Maintained
Section 35(1) identifies six broad categories of accounts.
1. Production or Manufacture of Goods
A registered person engaged in manufacturing must maintain records relating to production or manufacture.
This enables the taxpayer and the tax authorities to establish the relationship between:
Raw materials → Production → Finished goods → Sales → Closing stock
The detailed requirements for manufacturers are prescribed under the GST Rules.
Rule 56 requires a registered person manufacturing goods to maintain monthly production accounts showing quantitative details of raw materials or services used in manufacture and quantitative details of goods manufactured, including waste and by-products.
2. Inward and Outward Supplies
A registered person must maintain records of inward and outward supplies of goods or services or both.
Inward supplies generally relate to purchases or receipts by the business.
Outward supplies relate to sales or supplies made by the business.
These records are important because GST liability and input tax credit are closely connected with inward and outward supplies.
3. Stock of Goods
The taxpayer must maintain an account of stock.
Stock records are particularly important for businesses dealing in physical goods.
The records should help establish:
- opening stock;
- goods received;
- goods supplied;
- goods lost;
- goods stolen;
- goods destroyed;
- goods written off;
- goods given as gifts or free samples;
- closing stock;
- raw materials;
- finished goods;
- scrap; and
- wastage.
The detailed stock-record requirements are prescribed under Rule 56.
4. Input Tax Credit Availed
A registered person must maintain an account of input tax credit availed.
This is important because ITC reduces the taxpayer’s net GST liability, subject to the conditions and restrictions prescribed under the GST law.
The records should allow the taxpayer to establish the basis of the ITC claimed.
For example, a business claiming ITC on purchases should maintain appropriate purchase invoices and supporting records connecting those invoices with the relevant inward supplies.
5. Output Tax Payable and Paid
A registered person must maintain records of:
- output tax payable; and
- output tax paid.
This helps establish how the taxpayer’s GST liability was calculated and discharged.
The records should be capable of being reconciled with GST returns and the taxpayer’s accounting records.
6. Other Prescribed Particulars
Section 35 also covers such other particulars as may be prescribed.
This is important because the section itself provides the basic categories, while the CGST Rules provide more detailed requirements.
Rule 56, for example, prescribes additional records relating to imports, exports, reverse-charge supplies, advances, tax invoices, credit notes, debit notes, delivery challans, suppliers, recipients and storage locations.
Accounts at Principal Place of Business
Section 35(1) requires the registered person to maintain the relevant accounts at the principal place of business mentioned in the registration certificate.
This provides a clear statutory location for the taxpayer’s records.
However, where more than one place of business is specified in the registration certificate, the accounts relating to each place of business are required to be kept at the respective places of business.
The detailed rules also provide for maintaining books of account at the principal place of business and at the related additional places of business.
Can GST Accounts Be Maintained Electronically?
Yes.
Section 35 expressly permits a registered person to maintain accounts and other particulars in electronic form, subject to the prescribed manner.
This is particularly relevant for modern businesses that use:
- accounting software;
- ERP systems;
- cloud-based accounting systems;
- inventory-management software;
- electronic invoice systems;
- spreadsheets; and
- other digital record-keeping systems.
The fact that records are electronic does not remove the obligation to maintain accurate and complete records.
Electronic Records Under GST
The GST Rules contain specific provisions concerning electronic records.
The current CBIC Accounts and Records material provides that electronic records should be backed up appropriately so that information can be restored within a reasonable period if the records are destroyed because of accidents or natural causes.
A registered person maintaining electronic records must also be able to produce the relevant records or documents when demanded, in hard copy or an electronically readable format, as applicable.
The rules also address audit trails and inter-linkages for electronic records, including the relationship between source documents and financial accounts.
Records of Imported and Exported Goods or Services
The GST Rules require registered persons to maintain true and correct accounts of goods or services that are:
- imported;
- exported; or
- supplied under reverse charge,
along with relevant documents.
The documents can include:
- invoices;
- bills of supply;
- delivery challans;
- credit notes;
- debit notes;
- receipt vouchers;
- payment vouchers;
- refund vouchers; and
- e-way bills.
These documents create an audit trail for the underlying transactions.
Separate Records for Different Business Activities
Where a registered person carries out different activities, the GST Rules require records to be maintained separately for relevant activities such as:
- manufacturing;
- trading; and
- provision of services.
This is useful where one registered entity carries out multiple types of business.
For example, a company may manufacture goods as well as provide installation services. Its accounting system should be capable of identifying the relevant transactions and records for each activity.
Stock Records Under Section 35
Stock records are a major part of GST accounting.
A registered person, other than a person paying tax under the composition scheme under Section 10, is required under the Rules to maintain stock accounts for goods received and supplied.
The records include details such as:
- opening balance;
- receipts;
- supplies;
- goods lost;
- goods stolen;
- goods destroyed;
- goods written off;
- goods distributed as gifts;
- free samples;
- closing balance;
- raw materials;
- finished goods;
- scrap; and
- wastage.
This allows the tax authorities to compare physical and documentary movement of goods with the taxpayer’s GST records.
Records of Advances
A registered person is required to maintain a separate account of advances received, advances paid and adjustments made against those advances, as prescribed under the GST Rules.
This is relevant because GST treatment can depend on the nature of the supply and applicable time-of-supply provisions.
Proper recording of advances helps maintain a clear transaction trail.
Records of Tax Payable and Tax Paid
The GST Rules require specified registered persons to maintain accounts containing details of:
- tax payable;
- tax collected;
- tax paid;
- input tax;
- input tax credit claimed; and
- registers of tax invoices, credit notes, debit notes and delivery challans issued or received during the tax period.
These records provide the foundation for reconciling accounting records with GST returns.
Records of Suppliers and Customers
The GST Rules also require prescribed details relating to suppliers and recipients.
This includes the names and complete addresses of suppliers from whom goods or services are received and the names and complete addresses of persons to whom supplies are made, where required under the relevant provisions.
This information helps establish the parties involved in taxable transactions.
Records of Storage Locations
A registered person must also maintain the complete addresses of premises where goods are stored, including goods stored during transit, together with particulars of stock stored there, as prescribed.
This is particularly relevant for businesses that maintain:
- warehouses;
- godowns;
- distribution centres;
- third-party storage arrangements; or
- multiple stock locations.
Goods Stored at Undeclared Locations
The GST Rules contain a significant provision concerning taxable goods found stored at a location other than the declared locations without valid supporting documents.
In such circumstances, the proper officer may determine the tax payable on those goods as if the goods had been supplied by the registered person.
This makes accurate maintenance of storage-location records especially important.
Records for Manufacturers
Manufacturers have additional record-keeping responsibilities.
Rule 56 requires monthly production accounts showing quantitative details of:
- raw materials or services used in manufacturing;
- goods manufactured;
- waste; and
- by-products.
For a manufacturing business, GST records therefore go beyond simply maintaining sales invoices.
The records should provide a reasonable connection between raw materials consumed, production and finished goods.
Records for Service Providers
Service providers also have record-keeping requirements.
The GST Rules require registered persons supplying services to maintain accounts showing:
- quantitative details of goods used in providing each service;
- input services utilised; and
- services supplied.
For example, a service provider using materials and subcontracted services to deliver a project should maintain records capable of identifying those inputs and the corresponding outward services.
Records for Works Contractors
A registered person executing works contracts is required to maintain separate accounts for each works contract.
The prescribed information includes:
- names and addresses of persons on whose behalf the works contract is executed;
- description, value and quantity, where applicable, of goods or services received for the contract;
- description, value and quantity, where applicable, of goods or services used in the contract;
- payment details; and
- names and addresses of suppliers from whom goods or services were received.
Project-wise records are therefore particularly important for works contractors.
Records Maintained by Agents
Agents covered by the GST definition of agent also have prescribed accounting responsibilities.
The records may include:
- authorisation received from each principal;
- goods or services received on behalf of each principal;
- goods or services supplied on behalf of each principal;
- accounts furnished to each principal; and
- tax paid on receipts or supplies made on behalf of the principal.
These records help distinguish transactions carried out by an agent for different principals.
Records Maintained by Warehouses and Transporters
Section 35(2) extends record-keeping obligations beyond registered persons.
It provides that every owner or operator of a:
- warehouse;
- godown;
- other place used for storage of goods; and
- transporter,
must maintain prescribed records of the consignor, consignee and other relevant details of goods, regardless of whether the person is registered under GST.
The GST Rules provide further requirements for transporters and warehouse or godown operators.
Section 35(2) and Transporters
A transporter may be required to maintain records of goods transported, delivered and goods stored in transit, including records relating to different branches where applicable.
This helps the GST authorities trace the movement of goods through the supply chain.
Importantly, Section 35(2) applies whether or not the transporter is registered under GST.
Section 35(3) – Additional Accounts or Documents
Section 35(3) gives the Commissioner the power to notify a class of taxable persons to maintain additional accounts or documents for specified purposes.
This means that the accounts and records required under GST are not necessarily limited to the general categories listed in Section 35(1).
Where the law or a valid notification requires additional records for a specified class of taxpayers, those records must also be maintained.
Section 35(4) – Special Permission for Certain Taxable Persons
Section 35(4) addresses situations where the Commissioner considers that a class of taxable persons is not in a position to maintain accounts according to the normal requirements of Section 35.
In such cases, the Commissioner may, for reasons recorded in writing, permit that class of taxable persons to maintain accounts in the prescribed alternative manner.
This provision recognises that different businesses may have different operational circumstances.
Section 35(5) – Important Historical Change
One important point must be clarified when discussing Section 35.
The original Section 35 contained a sub-section (5) requiring certain registered persons above a prescribed turnover threshold to get their accounts audited by a chartered accountant or cost accountant and submit the prescribed audited accounts and reconciliation statement.
However, Section 35(5) was omitted with effect from 1 August 2021 by the Finance Act, 2021, through the notified amendment. The current Section 35 therefore does not contain that earlier mandatory GST audit provision.
This is important because older GST articles and documents may still reproduce the original Section 35(5).
Therefore, information stating that Section 35 itself currently requires every registered person crossing a particular turnover threshold to obtain a GST audit from a CA or CMA is outdated.
Does Section 35 Currently Require GST Audit by CA or CMA?
No, Section 35(5) itself no longer contains that requirement.
The sub-section was omitted with effect from 1 August 2021.
This does not mean that taxpayers have no audit, annual-return or financial-reporting obligations under any other law or provision. It specifically means that the earlier mandatory GST audit requirement contained in Section 35(5) is no longer part of the current Section 35.
Businesses should therefore distinguish between:
- the statutory requirement to maintain accounts under Section 35;
- annual return requirements;
- reconciliation statement requirements, where applicable under the current law and rules;
- audits required under other laws, such as company law or income-tax law; and
- departmental audits or special audits under other GST provisions.
Section 35(6) – Consequences of Not Accounting for Goods or Services
Section 35(6) is an important compliance provision.
Where a registered person fails to account for goods or services in accordance with Section 35(1), the proper officer can determine the amount of tax payable on the goods or services that have not been accounted for as if those goods or services had been supplied by the registered person.
The provision further applies the relevant tax-determination provisions mutatis mutandis. The current statutory framework also includes Section 74A in this reference following the later amendment to the tax-determination provisions.
In practical terms, failure to maintain proper records can therefore have direct tax consequences.
Example of Section 35(6)
Suppose a trader maintains records showing:
- Opening stock: 1,000 units
- Purchases: 5,000 units
- Recorded sales: 4,000 units
Based on these figures, closing stock should ordinarily be:
1,000 + 5,000 − 4,000 = 2,000 units
However, during verification, the records do not account for 500 units.
Depending on the facts and applicable provisions, the proper officer may determine tax payable on the unaccounted goods under Section 35(6).
This illustrates why stock reconciliation is important.
Section 35 and GST Returns
Accounts and records are closely connected with GST returns.
The figures reported in returns should be supported by the taxpayer’s underlying books and documents.
For example:
Sales register → Tax invoices → GST return → Output tax
and:
Purchase register → Supplier invoices → Eligible ITC → GST return
If these records do not reconcile, the taxpayer may face questions during scrutiny or other proceedings.
Section 35 and Input Tax Credit
Input tax credit is one of the most important areas where proper record maintenance matters.
A taxpayer claiming ITC should maintain the relevant tax invoices and other prescribed documents and ensure that the records support:
- supplier details;
- invoice details;
- taxable value;
- tax charged;
- receipt of goods or services;
- eligibility of the credit; and
- accounting and reporting of the credit.
Section 35 itself requires the registered person to maintain an account of ITC availed. The detailed GST Rules additionally require records of tax payable, tax collected and paid, input tax and ITC claimed.
Section 35 and Tax Invoices
Tax invoices form a major part of GST records.
A registered person should maintain records of tax invoices issued and received as required under the GST Rules.
Credit notes, debit notes and delivery challans are also relevant records.
The objective is to establish a documentary chain for both inward and outward supplies.
Section 35 and Credit Notes and Debit Notes
Credit notes and debit notes issued or received by a registered person should be properly recorded.
This is particularly important because these documents can affect:
- taxable value;
- output tax liability;
- input tax credit;
- customer balances; and
- supplier balances.
A proper accounting system should connect these documents with the original invoices and corresponding GST reporting.
Section 35 and E-Way Bills
E-way bills are also among the documents referred to in the GST Accounts and Records Rules in connection with specified records.
For businesses transporting goods, it is useful to maintain a proper connection between:
Invoice → E-way Bill → Dispatch → Delivery → Accounting Entry
This creates a stronger transaction trail.
Section 35 and Electronic Accounting Software
Businesses increasingly maintain their GST records through software rather than physical registers.
Electronic accounting can make it easier to:
- search invoices;
- track stock;
- reconcile GST returns;
- identify credit notes;
- monitor ITC;
- generate reports; and
- maintain transaction histories.
However, the software must preserve the integrity of the records and allow the required information to be produced when demanded.
The GST Rules also contain requirements concerning electronic backups, accessibility and audit trails.
Can Records Be Maintained in Excel?
GST law permits electronic maintenance of accounts in the prescribed manner.
Therefore, electronic records can be maintained using appropriate digital systems, provided the taxpayer satisfies the applicable statutory requirements.
However, businesses should ensure that spreadsheets or accounting files are:
- accurate;
- backed up;
- protected from unauthorised alteration;
- capable of producing the required records;
- supported by source documents; and
- retained for the prescribed period.
For larger businesses, specialised accounting or ERP systems may provide better controls and audit trails.
Can Books Be Maintained Outside the Registered Business Premises?
Section 35 establishes requirements concerning the principal and additional places of business, while the Rules contain detailed provisions regarding where books and records are to be maintained and how electronic records are handled.
Therefore, businesses should not assume that records can simply be kept at any location without considering the registration particulars and applicable rules.
For electronic records, accessibility and the ability to produce the records in the prescribed manner are particularly important.
How Long Should GST Records Be Preserved?
The retention period is primarily dealt with by Section 36, rather than Section 35 itself.
Section 36 generally requires a registered person to retain the relevant books of account and records until the expiry of 72 months from the due date for furnishing the annual return for the relevant financial year.
There is an extended requirement where the registered person is involved in an appeal, revision, other proceedings or an investigation relating to an offence.
In such circumstances, the records relating to the relevant matter must generally be retained for one year after final disposal of the relevant proceeding or investigation, or for the normal statutory period, whichever is later.
Therefore, taxpayers should not destroy GST records merely because a return has already been filed.
Section 35 and Departmental Verification
GST authorities may need to examine books and records for various purposes, including:
- scrutiny;
- audit;
- inspection;
- search;
- investigation;
- assessment;
- recovery proceedings; or
- verification of ITC and tax liability.
Proper records enable the taxpayer to demonstrate how transactions were recorded and how GST liabilities were calculated.
Poor or incomplete records can make it difficult to establish the correct tax position.
Importance of Reconciliation
One of the most practical aspects of Section 35 compliance is reconciliation.
Businesses should regularly reconcile:
Sales
Sales register ↔ Tax invoices ↔ GST outward-supply data ↔ GST liability
Purchases
Purchase register ↔ Supplier invoices ↔ GST inward-supply data ↔ ITC
Stock
Opening stock + purchases − sales = Closing stock
Tax
Output tax − eligible ITC = Net GST liability, subject to the applicable payment and utilisation rules.
Regular reconciliation can identify errors before they become larger compliance issues.
Common Mistakes in Maintaining GST Records
Businesses often face problems because of incomplete or inconsistent records.
1. Not Maintaining Stock Records
A business may maintain sales invoices but fail to properly track opening stock, purchases, wastage and closing stock.
2. Missing Purchase Invoices
ITC-related documents may not be properly preserved.
3. Poor Credit Note Tracking
Credit notes may be recorded in accounting software but not correctly reflected in GST reporting.
4. Incorrect Storage Location Records
Goods may be stored at locations that are not properly documented.
5. Manual Changes Without an Audit Trail
Electronic records may be altered without maintaining appropriate records of changes.
6. Lack of Backup
Electronic records may be lost because no proper backup exists.
7. Mismatch Between Books and Returns
Sales, purchases, ITC or tax payments may not reconcile with GST returns.
8. Destroying Records Too Early
Taxpayers may dispose of records without considering the statutory retention period under Section 36.
Practical GST Record-Keeping Checklist
A registered person can use the following checklist for Section 35 compliance:
- Maintain true and correct books of account.
- Record all inward and outward supplies.
- Maintain appropriate stock records.
- Record ITC availed.
- Record output tax payable and paid.
- Maintain tax invoices and other prescribed documents.
- Maintain credit and debit notes.
- Record advances and their adjustments.
- Maintain supplier and recipient details as required.
- Record declared storage locations and stock stored there.
- Maintain manufacturing or service records where applicable.
- Maintain project-wise records for works contracts where applicable.
- Keep appropriate records for imports, exports and reverse-charge supplies.
- Maintain electronic records securely where electronic accounting is used.
- Maintain proper backups of electronic records.
- Preserve records for the statutory period under Section 36.
- Reconcile books with GST returns regularly.
- Ensure that stock records reconcile with actual inventory.
- Ensure that ITC records are supported by appropriate documents.
- Be prepared to produce the required records when legally demanded.
Section 35 vs Section 36
Section 35 and Section 36 are closely related but deal with different matters.
| Basis | Section 35 | Section 36 |
|---|---|---|
| Main subject | Accounts and other records | Period of retention of accounts |
| Main requirement | What records must be maintained | How long records must be preserved |
| Main taxpayer concern | Proper record keeping | Record retention |
| Electronic records | Permitted subject to prescribed manner | Must be retained for prescribed period |
| Special proceedings | Provides accounting requirements | Extends retention in specified circumstances |
In simple terms:
Section 35 = Maintain the records
Section 36 = Preserve the records for the required period
Section 35 vs Section 44
Section 35 deals with maintaining books and records.
Section 44 deals with the annual return framework.
Therefore, maintaining accounts under Section 35 and filing an annual return are separate compliance requirements.
A taxpayer should not assume that filing the annual return eliminates the requirement to maintain the underlying books and documents.
Section 35 vs Section 65 Audit
Section 35 deals with maintenance of accounts and records.
Section 65 provides for departmental audit by the tax authorities.
The fact that Section 35(5) was omitted in 2021 does not eliminate the department’s statutory audit powers under other provisions of the CGST Act.
Similarly, Section 66 provides for a special audit in specified circumstances.
These provisions should not be confused with the former Section 35(5) requirement.
Section 35 and Special Audit Under Section 66
Section 66 permits a special audit in specified circumstances where an officer not below the rank of Assistant Commissioner, with the prior approval of the Commissioner, considers that the value has not been correctly declared or the credit availed is not within normal limits, having regard to the nature and complexity of the case and the interest of revenue.
The special audit is conducted by a chartered accountant or cost accountant nominated by the Commissioner.
This is different from the former mandatory audit requirement under Section 35(5), which was omitted from 1 August 2021.
Consequences of Poor Record Maintenance
Failure to properly maintain or retain books and records can have serious GST implications.
Depending on the circumstances, it may result in:
- difficulty substantiating ITC;
- difficulty establishing stock;
- discrepancies between books and returns;
- tax determination for unaccounted goods or services under Section 35(6);
- penalties under applicable provisions;
- complications during audit or investigation; and
- additional compliance or litigation risk.
Section 35(6) is particularly significant because the absence of proper accounting can lead to determination of tax on unaccounted goods or services as if they had been supplied.
Practical Example of Section 35 Compliance
Suppose ABC Traders is a registered wholesale business.
During a financial year, ABC Traders records:
- Opening stock: ₹20 lakh
- Purchases: ₹80 lakh
- Sales: ₹90 lakh
- Closing stock: ₹10 lakh
The business should be able to support these figures through:
- purchase invoices;
- sales invoices;
- credit notes;
- debit notes;
- stock registers;
- payment records;
- e-way bills where applicable;
- accounting records; and
- GST returns.
If the GST authorities examine the business, the records should provide a logical connection between the physical stock, purchase transactions, sales transactions and GST reported.
Key Points to Remember About Section 35
The major points of Section 35 can be summarised as follows:
- Section 35 deals with accounts and other records under GST.
- Every registered person must maintain true and correct accounts of specified business activities.
- Records include production or manufacture, inward and outward supplies, stock, ITC and output tax.
- Accounts are generally maintained at the principal place of business and, where applicable, the respective additional places of business.
- Electronic maintenance of accounts is permitted subject to prescribed requirements.
- Warehouse and godown operators and transporters have separate record-keeping obligations under Section 35(2).
- These obligations can apply even when the transporter or storage operator is not registered under GST.
- The Commissioner may prescribe additional accounts or documents for specified classes of taxable persons.
- Alternative methods of maintaining accounts may be permitted for specified classes where the Commissioner considers that the normal requirements cannot be followed.
- Section 35(5), which formerly required specified taxpayers to obtain a CA/CMA audit, was omitted with effect from 1 August 2021.
- Section 35(6) can result in tax determination on goods or services that are not properly accounted for.
- Rule 56 contains detailed requirements for stock, advances, tax records, invoices, suppliers, recipients and storage locations.
- Manufacturers, service providers, agents and works contractors have additional record requirements.
- Electronic records should be appropriately backed up and capable of being produced when required.
- The retention period is governed by Section 36 and is generally 72 months from the due date of furnishing the relevant annual return, subject to the extended-period rule for specified proceedings and investigations.
Frequently Asked Questions About Section 35 of CGST Act
Conclusion
Section 35 of the CGST Act, 2017 establishes the basic legal framework for maintaining accounts and other records under GST. Every registered person must maintain true and correct records relating to production, inward and outward supplies, stock, input tax credit and output tax, along with the additional particulars prescribed by the GST Rules.
The record-keeping requirements extend beyond ordinary sales and purchase books. Depending on the nature of the business, taxpayers may need to maintain detailed records relating to manufacturing, services, works contracts, advances, imports, exports, reverse-charge supplies, stock, storage locations, invoices, credit notes, debit notes and electronic transactions.
A particularly important current-law point is that the former Section 35(5) GST audit requirement was omitted with effect from 1 August 2021. Therefore, older information stating that Section 35 currently requires a CA or CMA audit based on the turnover threshold should not be treated as the current text of the provision.
Proper maintenance of records remains essential because Section 35(6) can have direct tax consequences where goods or services are not properly accounted for. Businesses should therefore maintain accurate, complete and properly backed-up records and preserve them for the period prescribed under Section 36.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
Why Choose Sarkari Bakery?
Official Information
Government schemes & banking information based on official sources.
Step-by-Step Guides
Simple application process explained for every service.
Regular Updates
Content updated whenever official rules or services change.
People-First Content
Helpful, transparent and user-focused content.
Pingback: Section 36 – Period of Retention of Accounts under the CGST Act, 2017 - Sarkari Bakery