Consequences of not keeping records


The assessment under GST is primarily centered on the taxpayer’s self-assessment, in which the taxpayer determines his own tax burden for the tax period and pays it. The department bases its compliance verification, examination, audit and investigation on documented checks rather than actual records. This led to the creation of a specific requirement that the taxpayer must follow in order to retain and maintain accounts and records. 


Benefits of maintaining records

Good record keeping has several advantages. It can assist you in: 

     Observe the health of your company so that you may make wise business decisions. 

     fulfill your tax and retirement responsibilities. 

     controlling your cash flow 

     Show your financial situation to


Who Is Responsible for Keeping GST Records and Accounts? 

The following individuals must keep records and accounts in accordance with GST: 

     Owner, manager of a warehouse or godown.

     Transporter, Taxpayer with a combined annual revenue of more than INR 2 Crores.

     Maintaining Records and Accounts for GST

     A registered person must maintain the following accounts and records under GST in accordance with Chapter VIII of the CGST Act. 


Records have to be kept under GST 

     Production or manufacturing of things; delivery of goods and/or services both domestically and internationally.

     Stock of products, claimed input tax credits, output taxes owed and paid.

     Other information may be required.


Accounts required under the GST 

     Register of produced items 

     Register for purchases, sales, and stock

     Taxes due and ITC received 

     Register of advance payments and receipts for services 

     Records kept electronically 


Consequences of failing to keep accurate records under the GST 

     The proper officer will treat any unaccounted goods and or services as though the taxpayer had supplied them in the event that the taxpayer fails to keep proper records regarding the goods and or services. The proper officer will ascertain whether or not such unaccounted goods are subject to tax. 


     The taxable individual will be required to pay the tax liability and penalty that were determined

     In accordance with the clause in Section 122 of the CGST Act, if a registered person- 

     Falsifies, substitutes financial records, creates fictitious accounts or documents, or provides any misleading information or a false tax return with the intention of avoiding paying taxes

     A person who provides any false information or a false return with the intent to avoid making the tax payment required by this Act would be penalized with a fine that is greater than the amount of tax that was avoided or 10,000 rupees, whichever is larger. 

     Anyone who assists or abets any of the aforementioned offenses faces penalties up to 25000 rupees under Section 122(3) of the Act

     According to Section 132 of the Act, if a registered person either engages in or assists in-


     Falsification, substituting financial data, creating phony accounts or documents, furnishing false information, or filing a fraudulent return are all offenses that could result in a six-month prison sentence or a fine.




Therefore, it is imperative that accurate accounts and records be kept in accordance with GST. If you want to know the precise information about the documents that need to be kept, you can ask a professional for help. You can get in touch with Srv Associates if you have any questions about GST registration.