Retention Period for Accounts Under GST: Comprehensive Guide

Understanding the retention period for accounts is crucial for businesses operating under the Goods and Services Tax (GST) framework. This guide will provide a detailed explanation of the retention periods, standards, and important factors to consider when maintaining GST-related records and accounts.

Standard Retention Period Under GST

According to the GST Act, each taxable registrant must maintain accounts and records for at least 72 months, or 6 years. This period is calculated from the latest filing date for the annual return for that fiscal year (FY).

Normal Scenario

In a normal scenario, the books of accounts should be retained for a period of 72 months from the due date of filing the Annual Return for a specific fiscal year. This requirement is effective from the implementation of GST and applies to all registered dealers.

Extended Retention Period

After the implementation of GST, every registered dealer must retain their accounts and records for 81 months from the end of the year to which the accounts pertain. There is an additional provision for extending this period by 12 months if tax proceedings are ongoing. The Government under the Maintenance of Goods Ledger (MGL) has set out detailed provisions for the maintenance of accounts and records.

It is important to note that once an entry is made in the register, it cannot be erased or overwritten. In case of an error, the correct entry must be made alongside the incorrect one and then attested. For records maintained in electronic form, a separate log is maintained for editing or deletion. Each book is assigned a serial number, and dealers are required to maintain comprehensive information.

Retention of Records Relating to Pending Disputes

Section 36 of the GST Act mandates that all records related to any pending dispute, including any appeals, must be retained until the dispute is finalized. It is advisable to keep records for at least 10 years because the Income Tax department can go back for up to this period. Non-availability of these records solely on account of GST is not considered preferable.

Retention Requirements Under Section 43

Section 43 of the GST act outlines specific retention requirements for registered taxable persons. These persons are mandated to retain their books of account and other records for 60 months from the last date of filing the Annual Return for the relevant fiscal year, ending on 31st December of the next financial year.

If the person is involved in an appeal, revision, or any other proceeding before an Appellate Authority, Tribunal, or Court, either filed by the person or by the department, they must retain the books of account and other records pertaining to the subject matter of such proceedings for one year after the final disposal of such proceeding or for the period specified under the sub-section, whichever is later.

These retention periods ensure transparency, compliance, and accountability in the handling of GST-related records and are essential for businesses to navigate the complexities of the GST framework.

Key Takeaways

The standard retention period is 72 months (6 years), calculated from the latest filing date of the annual return. Records related to pending disputes, including appeals, should be retained until the dispute is finalized. Retention period may be extended by 12 months for tax proceedings. Accurate record-keeping and adherence to these retention periods are crucial for compliance.

Conclusion

Ensuring proper retention of GST-related records is not only a legal requirement but also a practical necessity for maintaining business operations smoothly. Understanding and adhering to the retention periods will help businesses stay compliant and prepared for any audits or disputes.

Additional Resources

For further detailed information, refer to the official GST portal and related Maintenance of Goods Ledger (MGL) guidelines.