Accounts and Records under GST

Table of Contents:-

Accounts and Records under GST – Complete Guide

Every GST-registered person is required to maintain true and correct accounts and records relating to its business activities.

Proper maintenance of accounts under GST is important not only for filing returns but also for substantiating turnover, tax liability, input tax credit, stock movements, exports, imports, reverse-charge transactions and other information during GST scrutiny, assessment or departmental proceedings.

Section 35 of the Central Goods and Services Tax Act, 2017 and the corresponding CGST Rules prescribe the principal requirements relating to accounts and records.

Businesses seeking end-to-end assistance with GST registration, return filing, input tax credit, refunds, assessments and litigation may refer to our GST & Indirect Tax Advisory Services in India.

The statutory framework can also be referred to on the official CBIC Accounts and Records Rules.

What Accounts and Records Must Be Maintained Under GST?

Every registered person should maintain true and correct records relevant to the business, including records relating to:

production or manufacture of goods;
inward supply of goods or services;
outward supply of goods or services;
stock of goods;
input tax credit availed;
output tax payable and paid;
imports and exports;
supplies liable to reverse charge; and
other particulars prescribed under GST law.

Section 35 of the CGST Act specifically requires registered persons to maintain records relating to production/manufacture, inward and outward supplies, stock, input tax credit and output tax.

Important GST Documents to Be Maintained

A GST-registered business should preserve relevant supporting documents connected with its transactions.

These may include:

Tax Invoices;
Bills of Supply;
Delivery Challans;
Credit Notes;
Debit Notes;
Receipt Vouchers;
Payment Vouchers;
Refund Vouchers; and
applicable e-way bill records.

These documents form the supporting audit trail for transactions reported in GST returns.

The official CBIC Accounts and Records Rules specifically prescribe maintenance of relevant documents including invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers and refund vouchers.

For transactions involving movement of goods, also refer to our E-Way Bill under GST.

Separate Records for Different Business Activities

Where a registered person undertakes different types of activities, proper records should be maintained for the respective business operations.

For example, a business may simultaneously undertake:

manufacturing;
trading; and
provision of services.

Accounting records should enable the taxpayer to identify and substantiate transactions pertaining to each activity.

This becomes particularly important where the business has different GST rates, exempt supplies, exports, reverse-charge transactions or different input tax credit positions.

Stock Records Under GST

Stock records are particularly important for businesses dealing in goods.

A registered person, other than a person covered by the relevant composition provisions, is required to maintain prescribed stock details.

These may include:

opening balance;
goods received;
goods supplied;
goods lost;
goods stolen;
goods destroyed;
goods written off;
goods disposed of by way of gift;
free samples;
closing stock;
raw materials;
finished goods;
scrap; and
wastage.

The GST Rules expressly require stock records containing these particulars.

Businesses should periodically reconcile physical stock with accounting and GST records.

Differences between books, physical inventory and GST records can create issues during departmental verification.

Records of Tax Payable, Tax Paid and Input Tax Credit

GST records should allow a registered person to substantiate its tax position for each tax period.

Relevant records include:

output tax payable;
GST collected;
GST paid;
input tax;
input tax credit claimed;
reverse-charge liability, where applicable;
invoices issued;
credit notes;
debit notes; and
delivery challans.

Input tax credit is often one of the largest GST exposures for businesses.

Therefore, businesses should maintain a clear reconciliation between:

Purchase Register → Supplier GST Data → Eligible ITC → ITC Claimed in GST Returns

For wider assistance with ITC review and GST reconciliation, refer to our GST & Indirect Tax Advisory Services.

Records of Advances

GST-registered businesses should maintain appropriate records of:

advances received;
advances paid, where relevant; and
adjustments made against such advances.

The GST treatment of advances depends on the nature of the transaction and applicable provisions.

Accounting systems should therefore provide a proper trail from advance receipt/payment to the final invoice or adjustment.

Details of Suppliers and Customers

GST records should contain prescribed details relating to suppliers and recipients.

This may include:

name and complete address of suppliers from whom taxable goods or services are received;
name and complete address of persons to whom goods or services are supplied where required; and
other transaction particulars required under GST law.

Maintaining accurate supplier master and customer master data also helps in:

GSTIN validation;
invoice generation;
ITC reconciliation;
return filing; and
responding to GST notices.

Record of Places Where Goods Are Stored

A registered business should maintain complete information regarding places where its goods are stored.

This can include:

principal place of business;
additional places of business;
warehouses;
godowns;
factories;
branches; and
goods stored during transit, where applicable.

The prescribed GST records include the complete address of premises where goods are stored and particulars of stock stored at such premises.

If business operations expand to a new location, the taxpayer should also examine whether its GST registration requires amendment.

For registration-related guidance, refer to our GST Registration Procedure in India.

Goods Stored at an Undeclared Place

Businesses should be particularly careful about storing taxable goods at premises that are not appropriately reflected in GST records or registration particulars.

Under the GST Accounts and Records Rules, where taxable goods are found stored at an undeclared place without valid supporting documents, the proper officer may determine tax as if such goods had been supplied.

Accordingly, businesses operating multiple warehouses, godowns or temporary storage locations should review their GST registration and documentation periodically.

Where Should GST Books of Account Be Maintained?

Section 35 provides that a registered person should maintain books and records at the principal place of business mentioned in the GST registration certificate.

Where more than one place of business is specified, records relating to each place should be maintained appropriately.

Electronic maintenance of records is permitted under GST.

The statutory framework specifically permits records to be kept in electronic form subject to prescribed conditions.

For businesses operating across several locations, centralised accounting systems should still provide appropriate access and segregation of records relating to individual GST registrations and places of business.

Electronic GST Records

Businesses increasingly maintain books and GST documentation electronically through:

accounting software;
ERP systems;
cloud accounting applications;
document management systems; and
GST compliance software.

GST rules permit electronic maintenance of records, but appropriate controls must be maintained.

Electronic records should have proper backups so information can be restored in the event of destruction or data loss.

When required by the tax authorities, relevant electronic records should also be capable of being produced in hard copy or electronically readable format.

Maintain Proper Backup of Electronic Records

GST-registered businesses maintaining digital records should establish an appropriate backup system.

Good practices include:

regular automated backups;
secure cloud or external backup;
restricted user access;
maker-checker controls;
audit trails;
password protection;
document indexing; and
periodic backup-restoration testing.

GST compliance records should not depend upon a single computer or local storage device.

The CGST Rules specifically require proper electronic backup so records can be restored within a reasonable period in the event of accidental destruction or natural causes.

Corrections in Books and Records

Businesses should maintain a proper audit trail when correcting accounting records.

Under GST record-maintenance requirements, entries in registers, accounts and documents should not simply be erased, effaced or overwritten.

Where records are maintained electronically, the system should preserve appropriate information regarding entries edited or deleted.

The original article correctly highlighted this requirement, including the need to preserve a log of edits or deletions in electronic records.

This makes accounting software audit trails and access controls particularly important for GST compliance.

GST Records for Manufacturing Companies

Manufacturers have additional record-keeping considerations because GST records must reconcile with production and inventory information.

A registered manufacturer is required to maintain monthly production accounts showing quantitative details relating to:

raw materials or services used in manufacture;
goods manufactured;
waste generated; and
by-products.

The GST Rules specifically prescribe monthly production accounts for registered manufacturers.

For a detailed discussion of manufacturing-related GST issues, refer to our Impact of GST on Manufacturing Sector.

Manufacturers should ideally reconcile:

Raw Materials + Production + Finished Goods + Scrap/Wastage + Dispatches + GST Outward Supplies

This helps identify differences before departmental scrutiny.

GST Records for Service Providers

Registered service providers should maintain appropriate records relating to:

goods used in providing services;
input services utilised; and
services supplied.

The prescribed Rules specifically require service suppliers to maintain accounts showing quantitative details of goods used, input services utilised and services supplied.

For service businesses, project-level or client-level accounting can also help substantiate:

revenue;
expense allocation;
export of services;
place of supply; and
input tax credit.

Records for Works Contracts

Persons executing works contracts should maintain appropriate separate records relating to such contracts.

These may include:

names and addresses of persons for whom the contract is executed;
description, value and quantity of goods or services received;
description, value and quantity of goods or services used in execution;
payments received; and
names and addresses of suppliers.

These record-keeping requirements are specifically prescribed under the CGST Rules.

Separate project-wise accounting is therefore advisable for businesses involved in construction and works contracts.

Records to Be Maintained by Agents

Agents acting for principals may have additional GST record-keeping requirements.

Depending upon the arrangement, records may include:

authorisation received from each principal;
details of goods or services received on behalf of the principal;
details of goods or services supplied on behalf of the principal;
accounts furnished to the principal; and
tax paid in relation to relevant supplies.

The underlying agreements should also correspond with the GST and accounting treatment followed by the parties.

Records for Warehouse and Godown Operators

Owners or operators of warehouses and godowns have specific record-maintenance requirements under GST.

Records should enable identification of:

goods received;
duration of storage;
dispatch;
movement;
receipt;
disposal; and
ownership of goods.

Goods should be stored so that they can be identified item-wise and owner-wise and made available for physical verification or inspection by the proper officer when required.

This is particularly relevant for third-party logistics companies and businesses using multiple storage facilities.

Records for Transporters

Transporters are also subject to specific GST record-keeping requirements.

Relevant records may include:

goods transported;
goods delivered;
goods stored during transit; and
branch-wise transportation records.

Certain transporters, warehouse operators and other persons covered by the prescribed rules may be required to obtain enrolment through FORM GST ENR-01, where applicable.

Businesses moving goods should also examine the requirements relating to e-way bills.

For more information, see our E-Way Bill under GST.

Records Relating to Reverse Charge

Businesses should separately identify supplies attracting tax under the Reverse Charge Mechanism (RCM).

Relevant records should enable the taxpayer to determine:

nature of supply;
supplier;
taxable value;
GST liability;
date of payment;
return reporting; and
input tax credit eligibility.

A separate RCM ledger or periodic reconciliation is advisable for businesses with significant reverse-charge transactions.

Records Relating to Imports and Exports

Registered persons should maintain true and correct records relating to goods or services imported or exported.

For imports, records may include:

Bills of Entry;
import invoices;
customs duty records;
IGST paid on imports; and
corresponding input tax credit.

For exports, records may include:

export invoices;
shipping bills;
LUT/Bond documentation;
foreign inward remittance records where relevant;
export declarations; and
GST refund documentation.

Businesses claiming GST refunds should maintain particularly strong documentary support.

For professional assistance, refer to our GST Refund Services in India.

You may also refer to our Tips for Uploading Documents at the Time of GST Refund.

GST Records and Return Filing

Accounting records form the basis for GST return filing.

Businesses should periodically reconcile:

Books of Account → Sales Register → Purchase Register → GST Returns → Input Tax Credit → Tax Payments

Differences should be investigated promptly rather than accumulated until the year end.

A robust monthly closing process can reduce:

incorrect tax reporting;
ITC mismatch;
duplicate credit;
omitted invoices;
incorrect GSTIN;
tax short-payment;
interest exposure; and
GST notices.

For further information, see our GST Return Filing Process.

How Long Should GST Records Be Preserved?

Section 36 of the CGST Act prescribes the period for retention of accounts and records.

In general, registered persons required to maintain books and records should retain them for 72 months from the due date for furnishing the annual return for the year to which those records relate.

This effectively creates a six-year statutory retention period calculated from the relevant annual-return due date rather than simply from the date of the underlying invoice.

Longer Retention Where Appeal or Proceedings Are Pending

Where the registered person is involved in an appeal, revision, other proceedings or specified investigation, the relevant records may need to be retained beyond the normal 72-month period.

Section 36 provides for retention for:

the normal statutory retention period; or
one year after final disposal of the relevant appeal, revision, proceeding or investigation,

whichever is later.

Businesses involved in litigation should therefore not destroy relevant GST records merely because the ordinary six-year period has expired.

Records Required During GST Audit or Departmental Scrutiny

When GST authorities examine a taxpayer’s compliance, they may compare multiple sources of information.

Businesses should be prepared to produce or reconcile:

trial balance;
general ledger;
sales register;
purchase register;
stock register;
invoices;
credit/debit notes;
e-way bill data;
e-invoice data, where applicable;
GST returns;
input tax credit records;
tax payment records;
financial statements;
bank records;
contracts; and
supporting documentation.

For GST departmental verification and audit-related assistance, refer to our GST Audit Services in India.

You may also review our GST Audit Checklist for common areas that businesses should examine.

GST Record-Keeping Checklist for Businesses

As a practical control, businesses should ensure that they maintain and periodically review:

GST-compliant invoices;
bills of supply, where applicable;
debit and credit notes;
delivery challans;
e-way bill records;
sales register;
purchase register;
stock records;
input tax credit reconciliation;
output tax reconciliation;
reverse-charge records;
advances;
imports and exports;
branch or stock transfers;
records of additional places of business;
manufacturing records, where applicable;
works-contract records, where applicable;
electronic backups; and
audit trails.

The precise requirements will depend on the nature and scale of the business.

Common GST Record-Keeping Mistakes

Businesses should avoid common weaknesses such as:

incomplete stock records;
differences between books and GST returns;
claiming ITC without adequate supporting records;
unrecorded credit/debit notes;
storing goods at undeclared locations;
missing e-way bill documentation;
incorrect GSTIN in accounting records;
lack of branch-wise records;
inability to trace transactions to supporting invoices;
poor electronic backup;
editing accounting entries without an audit trail; and
destroying records before the statutory retention period expires.

These weaknesses can make otherwise explainable transactions difficult to substantiate during GST proceedings.

Best Practices for Maintaining GST Records

A sound GST accounting system should ideally include:

monthly books-to-GST reconciliation;
purchase-to-ITC reconciliation;
sales-to-return reconciliation;
stock reconciliation;
invoice numbering controls;
vendor and customer master validation;
e-way bill reconciliation;
e-invoice reconciliation, where applicable;
RCM review;
refund reconciliation;
electronic backup;
restricted access rights;
maker-checker controls; and
periodic GST health checks.

For businesses with high transaction volumes, these controls should ideally be built into the accounting or ERP system.

Importance of GST Records for Manufacturing Businesses

Record keeping is particularly important for manufacturing entities due to the movement and transformation of physical inventory.

Manufacturers should maintain clear quantitative records covering:

raw materials;
work in progress;
finished goods;
scrap;
wastage;
job work;
stock transfers; and
sales.

This allows production records to be reconciled with both financial accounts and GST returns.

For more detailed guidance, visit our Impact of GST on Manufacturing Sector in India.

Importance of GST Records for Foreign-Owned Businesses

Foreign-owned Indian subsidiaries are subject to the same GST record-keeping framework applicable to other registered businesses in India.

Such companies should ensure that their global accounting or ERP systems are appropriately configured for Indian GST requirements, including:

GSTIN;
tax invoice particulars;
HSN/SAC;
CGST/SGST/IGST;
input tax credit;
e-invoicing;
e-way bills; and
GST return reconciliations.

Foreign businesses setting up operations in India may refer to our India Market Entry Consulting Services for incorporation and regulatory assistance.

Frequently Asked Questions on Accounts and Records under GST

Who is required to maintain accounts and records under GST?

Every registered person is required to maintain the accounts and records prescribed under Section 35 of the CGST Act and the applicable Rules.

Certain other persons, including warehouse operators and transporters, also have prescribed record-keeping requirements.

What are the main records required under GST?

Important records include inward and outward supplies, production or manufacture, stock, input tax credit, output tax payable and paid, invoices, credit/debit notes and other prescribed transaction documents.

Is a stock register mandatory under GST?

Registered persons covered by the relevant GST rules are required to maintain prescribed stock records, including opening balance, receipts, supplies, losses, destruction, write-offs, free samples, raw materials, finished goods, scrap and wastage.

Can GST books be maintained electronically?

Yes. GST records can be maintained electronically subject to the prescribed requirements.

Proper electronic backups should be maintained, and records should be capable of being produced to the tax authorities when required.

How long should GST records be retained?

GST accounts and records are generally required to be preserved for 72 months from the due date of furnishing the annual return for the relevant year.

A longer period can apply where litigation, proceedings or specified investigations remain relevant.

Where should GST books of accounts be maintained?

Books relating to the principal and additional places of business should be maintained or made accessible in accordance with Section 35 and the applicable Rules.

What records should a manufacturer maintain under GST?

In addition to general GST records, registered manufacturers are required to maintain monthly production accounts showing quantitative details of inputs used, goods manufactured, waste and by-products.

Are warehouse operators required to maintain GST records?

Yes. Warehouse and godown operators are required to maintain prescribed records relating to goods stored, dispatch, movement, receipt and disposal.

What happens if goods are stored at an undeclared place?

Where taxable goods are found at an undeclared location without valid documentation, the GST rules permit the proper officer to determine tax on such goods as if they had been supplied.

Do GST records matter during an assessment or audit?

Yes. Proper books and supporting documentation are critical for substantiating turnover, input tax credit, tax payments, stock movements and other transactions during GST departmental proceedings.

How EzyBiz India Can Assist

EzyBiz India Consulting LLP assists Indian businesses, multinational companies and foreign-owned entities with GST accounting, compliance and advisory matters.

Our support may include:

GST registration;
review of GST books and records;
input tax credit reconciliation;
GST return reconciliation;
stock and GST reconciliation;
GST return filing;
e-way bill advisory;
GST refund support;
GST audit assistance;
responses to GST notices;
GST assessments;
GST appeals and litigation; and
GST health checks.

For comprehensive GST support, visit our GST & Indirect Tax Advisory Services in India.

Need Professional Business Advisory Support?

Speak with our experienced professionals for practical assistance with your business, tax and regulatory requirements in India.

Speak With Our Experts

Related Services

Official References

Prepared By

EzyBiz India Consulting LLP

Reviewed By: Anil Agrawal, Chartered Accountant
Last Updated: August 2026

Disclaimer

The information contained on this page is intended for general informational purposes only and should not be treated as legal, tax, accounting or regulatory advice.

GST record-keeping requirements may vary depending upon the nature of the business, registration status, transactions and applicable provisions. GST law, rules, notifications and procedural requirements may also change from time to time.

Businesses should review the latest applicable provisions and official government guidance or obtain professional advice before taking any action.