What is Accounting.Purpose of maintaining Accounts.Accounts & Records in GST.

1. Accounts & Records

2. Presentation
Plan • What is Accounting
• Purpose of maintaining
Accounts
• Accounts & Records in
GST
• Audit
• Special Audit
• Inspection, Search,
Seizure & Arrest
• Other related matters

3. What is accounting.......
It is a systematic process of
identifying, recording, measuring,
classifying, verifying, summarizing,
interpreting and communicating
financial information. It reveals
profit or loss for a given period, and
the value and nature of a firm's
assets, liabilities and owners'
equity.
Accounting is one of the
key functions for almost
any business; it may be
handled by a
bookkeeper and
accountant at small
firms or by sizable
finance departments
with dozens of
employees at large
companies.

4. Accounting helps
in decision
making,
planning, and
controlling
processes
It helps in
recording,
classifying and
finally
summarizing the
transactions in a
Purpose of maintaining….books of accounts…

5. Financial statements
and accounts are used
to represent the
organization to the
stakeholders such as
debtors, creditors,
government, and
investors, customers
and employees
Proper accounting
systems will take care of
working capital and any
other cash requirements
within the business
organization.
Purpose of maintaining….books of accounts…

6. In order to get any loan
from the financial
institution, ONE must be
able to present their
financial status in
acceptable order
Any economic or any
decision regarding the
business organization is
made depending on the
financial statement of
the organization
Purpose of maintaining….books of accounts…

7. under the Companies Act, 2013….
Books should
be
maintained
for a period
of 8 years
from the end
of the
relevant
financial
year.
Sales and purchase of goods and service
Assets and liabilities
Item of cost ...
All companies incorporated in India are required to
mandatorily maintain book of accounts
The book of accounts has to be maintained at
the Registered Office of a Company
Books of Accounts
includes records
maintained in respect of:
Sum or money received
and expended and matters
in relation to which the
receipt and expenditure
take place

8. …under GST
Assessment in GST is
mainly focused on self-
assessment
In the Self- Asst system, the compliance verification
is to be done through documentary checks rather
than physical controls.
This requires certain obligations to be cast on the
taxpayer for keeping and maintaining accounts and
records

9. Governing Legal
Provisions......
• CHAPTER VIII - ACCOUNTS AND RECORDS
• Sec.35 – Accounts and other records
• Sec. 36 – Period of retention of accounts

10. SEC.35. (1) Every registered person shall…..
keep and maintain,
at his principal place of business,
as mentioned in the certificate of
registration,
a true and correct account of—
(a) production or manufacture of goods;
(b) inward and outward supply of G or S or
both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be
prescribed:

11. Proviso….
Provided that where
more than one place of
business is specified in
the certificate of
registration, the
accounts relating to
each place of business
shall be kept at such
places of
business
Provided further that the
registered person may
keep and maintain such
accounts and
other particulars in
electronic form in such
manner as may be
prescribed.

12. Every owner or operator of
warehouse or godown or any other
place used for
storage of goods and every
transporter, irrespective of
whether he is a registered person
or not,
shall maintain records of the
consigner, consignee and other
relevant details of the
goods in such manner as may be
prescribed.
Sec. 35 (2)

13. 35(3) The Commissioner
may notify a class of
taxable persons to
maintain additional
accounts or documents
for such purpose as may
be specified therein.
35 (4) Where the
Commissioner considers
that any class of taxable
person is not in a
position to keep and
maintain accounts in
accordance with the
provisions of this section,
he may, for reasons to be
recorded in writing, permit
such class of taxable
persons to maintain
accounts in such manner as
may be prescribed

14. (5) Every registered person whose
turnover during a financial year
exceeds the
prescribed limit shall get his
accounts audited by a chartered
accountant or a cost accountantand
shall submit a copy of the audited
annual accounts, the reconciliation
statement

15. If not maintained.....

16. Period for Retention of Accounts under GST
36. Every registered person
required to keep and maintain
books of account or other
records in accordance with the
provisions of sub-section (1) of
section 35 shall retain them
until the expiry of seventy-two
months from the due date of
furnishing of annual return for
the year pertaining to such
accounts and records:

17. Provided that a registered person, who is a
party to an appeal or revision or
any other proceedings before any
Appellate Authority or Revisional Authority
or Appellate Tribunal
or court, whether filed by him or by the
Commissioner, or is under investigation for
an offence,
shall retain the books of account and other
records pertaining to
the subject matter of such appeal or
revision or proceedings or investigation for
a period of one year after final disposal of
such appeal or revision or proceedings or
investigation, or for
the period specified above, whichever is
later.

18. Period for Retention of Accounts under GST
As per the GST Act, every
registered taxable person
must maintain the accounts
books and records for at
least 72 months (6 years).
The period will be counted
from the last date of filing of
Annual Return for that year.
The last date of filing the
Annual return is
31st December of the
following year.
If the taxpayer is a part of any proceedings
before any authority (First Appellate) or is
under investigation then he must maintain
the books for 1 year after the order of such
proceedings/appeal has been passed.
For example:
For the year 2017-18,
the due date of filing
the annual return is
31.12.2018.
The books & records
of 2017-2018 must be
maintained for 6
years,
i.e., 31.12.2023

19. AUDIT
CHAPTER XIII
AUDIT
SEC. 65 AUDIT BY TAX
AUTHORITIES
SEC66 SPECIAL AUDIT

20. DEFINITION...
(13) “audit” means the examination
of records, returns and other
documents maintained or furnished
by the registered person under this
Act or the rules made there under or
under any other law for the time
being in force
to verify the correctness of turnover
declared, taxes paid, refund claimed
and input tax credit availed, and to
assess his compliance with the
provisions of this Act or the rules
made there under;

21. TYPES OF
AUDIT
Audit by
Department
Special Audit:
Audit by Chartered
Accountant or a
Cost Accountant

22. Section 65 – Audit by Tax Authorities
(1) The Commissioner or any officer authorised by him, by way of a
general or a specific order, may undertake audit of any registered
person for such period, at such frequency and in such manner as may
be prescribed.
(2) The officers referred to in sub-section (1) may conduct audit at the
place of business of the registered person or in their office.
(3) The registered person shall be informed by way of a notice not less
than fifteen working days prior to the conduct of audit in such manner
as may be prescribed.

23. Provided that where
the Commissioner is
satisfied that audit in
respect of such
registered person
cannot be completed
within three months, he
may, for the reasons to
be recorded in writing,
extend the period by a
further period not
exceeding six months.
Explanation.––For the
purposes of this sub-
section, the expression
“commencement of audit”
shall mean the date on
which the records and other
documents, called for by the
tax authorities, are made
available by the registered
person or the actual
institution of audit at the
place of business,
whichever is later.
(4) The audit under sub-section (1) shall be completed within a period of three
months from the date of commencement of the audit:

24. Action by the proper officer upon
conclusion of the audit....
The proper officer shall,
on conclusion of audit,
within 30 days inform
the taxable person
about his findings,
reasons for findings and
the taxable person’s
rights and obligations in
respect of such
findings.

25. Action by the proper officer upon
conclusion of the audit....
Where the audit
conducted results in
detection of tax not paid
or short paid or
erroneously refunded,
or input tax credit
wrongly availed or
utilised, the proper
officer may initiate
action under section 73
or section 74.

26. Section 66 – Special Audit
(1) If at any stage of scrutiny, inquiry,
investigation or any other proceedings
before him, any officer not below the rank of
Assistant Commissioner, having regard to
the nature and complexity of the case and
the interest of revenue , is of the opinion
that
direct such registered person by a communication
in writing to get his records including books of
account examined and audited by a chartered
accountant or a cost accountant as may be
nominated by the Commissioner.
the value has not
been correctly
declared or the
credit availed is not
within the normal
limits, he may, with
the prior approval of
the Commissioner,
(2) The chartered
accountant or cost
accountant so
nominated shall, within
the period of ninety
days, submit a report of
such audit duly signed
and certified

27. • (4) The registered person
shall be given an
opportunity of being
heard in respect of any
material gathered on the
basis of special audit
under sub-section (1)
which is proposed to be
used in any proceedings
against him under this Act
or the rules made
thereunder.
Section 66 – Special Audit

28. Action by the proper officer....
(6) Where the special
audit , results in detection
of tax not paid or short
paid or erroneously
refunded, or input tax
credit wrongly availed or
utilised, the proper officer
may initiate action under
section 73 or section 74.

29. Inspection, Search, Seizure & Arrest)

30. Section 67 – Power of Inspection
Search and Seizure
• (1) Where the proper
officer, not below the rank
of Joint Commissioner,
has reasons to believe
that––
• (a) a taxable person has
suppressed any
transaction relating to
supply of goods or
services or both or the
stock of goods in hand, or
has claimed input tax
credit in excess of his
entitlement under this Act
or has indulged in
contravention of any of
the provisions of this Act
or the rules made
thereunder to evade tax
under this Act; or

31. • (b) any person engaged in
the business of
transporting goods or an
owner or operator of a
warehouse or a godown
or any other place is
keeping goods which have
escaped payment of tax
or has kept his accounts
or goods in such a
manner as is likely to
cause evasion of tax
payable under this Act,
• he may authorise in
writing any other officer
of central tax to inspect
any places of business of
the taxable person or the
persons engaged in the
business of transporting
goods or the owner or
the operator of
warehouse or godown or
any other place.
Inspection, Search, Seizure & Arrest)

32. • (2) Where the proper
officer, not below the rank
of Joint Commissioner,
either pursuant to an
inspection carried out
under sub-section (1) or
otherwise, has reasons to
believe that any goods
liable to confiscation or any
documents or books or
things, which in his opinion
shall be useful for or
relevant to any proceedings
under this Act, are secreted
in any place,
• he may authorise in writing
any other officer of central
tax to search and seize or
may himself search and
seize such goods,
documents or books or
things:
Inspection, Search, Seizure & Arrest)

33. • Provided that where it is
not practicable to seize any
such goods, the proper
officer, or any officer
authorised by him, may
serve on the owner or the
custodian of the goods an
order that he shall not
remove, part with, or
otherwise deal with the
goods except with the
previous permission of such
officer:
• 3) The documents, books or
things referred to in sub-
section (2) or any other
documents, books or things
produced by a taxable
person or any other person,
which have not been relied
upon for the issue of notice
under this Act or the rules
made thereunder, shall be
returned to such person
within a period not
exceeding thirty days of the
issue of the said notice.
Inspection, Search, Seizure & Arrest)

34. • (4) The officer authorised
under sub-section (2) shall
have the power to seal or
break open the door of any
premises or to break open any
almirah, electronic devices,
box, receptacle in which any
goods, accounts, registers or
documents of the person are
suspected to be concealed,
where access to such
premises, almirah, electronic
devices, box or receptacle is
denied.
• (5) The person from whose
custody any documents are
seized under sub-section (2)
shall be entitled to make
copies thereof or take extracts
therefrom in the presence of
an authorised officer at such
place and time as such officer
may indicate in this behalf
except where making such
copies or taking such extracts
may, in the opinion of the
proper officer, prejudicially
affect the investigation.
Inspection, Search, Seizure & Arrest)

35. • The provisions of the Code
of Criminal Procedure,
1973, relating to search and
seizure, shall, so far as may
be, apply to search and
seizure under this section
subject to the modification
that sub-section (5) of
section 165 of the said Code
shall have effect as if for the
word “Magistrate”,
wherever it occurs, the
word “Commissioner” were
substituted.

36. Section 68 – Inspection of Goods in
Movement
• (1) The Government may
require the person in charge
of a conveyance carrying
any consignment of goods
of value exceeding such
amount as may be specified
to carry with him such
documents and such
devices as may be
prescribed.
• ) Where any conveyance
referred to in sub-section
(1) is intercepted by the
proper officer at any place,
he may require the person
in charge of the said
conveyance to produce the
documents prescribed
under the said sub-section
and devices for verification,
and the said person shall be
liable to produce the
documents and devices and
also allow the inspection of
goods.

37. Section 69 – Power to Arrest
• (1) Where the Commissioner has
reasons to believe that a person
has committed any offence
specified in clause (a) or clause
(b) or clause (c) or clause (d) of
sub-section (1) of section 132
which is punishable under clause
(i) or (ii) of sub-section (1), or
sub-section (2) of the said
section, he may, by order,
authorise any officer of central
tax to arrest such person.
• Section 132 – Punishment for
Certain Offences
• supplies any goods or services or
both without issue of any invoice,
in violation of the provisions of
this Act or the rules made
thereunder, with the intention to
evade tax;
• issues any invoice or bill without
supply of goods or services or
both in violation of the provisions
of this Act, or the rules made
thereunder leading to wrongful
availment or utilisation of input
tax credit or refund of tax;

38. OTHERS

39. Account/Records Information Required By Whom?
Register of Goods
Produced
Account should contain detail of
goods manufactured in a factory
or production house
Every assessee carrying out
manufacturing activity
Purchase Register All the purchases made within a
tax period for manufacturing of
goods or provision of services
All Assessee
Sales Register Account of all the sales made
within a tax period must be
maintained
All Assessee
Stock Register This register should contain a
correct stock of inventory
available at any given point of
time
All Assessee

40. Account/Records Information Required By Whom?
Input Tax Credit Availed This register should maintain the
details of Input Tax Credit availed for a
given tax period
All Assessee
Output Tax Liability This register should maintain the
details of GST liability outstanding to
be adjusted against input credit or paid
out directly
All Assessee
Output Tax Paid This register should maintain the
details of GST paid for a particular tax
period
All Assessee
Other Records Specified Government can further specify by way
of a notification, additional records
and accounts to be maintained
Specific Businesses as
notified by the
government

43. Under Income Tax Act
• If the sale/turnover/gross
receipts from the business
or profession is more than
Rs. 25,00,000 or the
income from business or
profession is more than Rs.
2,50,000 in any of the 3
preceding years, then
books of accounts will be
compulsorily maintained.
For how long should the
books be maintained?
Books should be
maintained for a period of
6 years from the end of the
relevant year.
Books of accounts as per Rule 6F
Cash Book
• Journal
• Ledgers
• Copies of bills or receipts
• Daily cash register with details of
patients, services rendered, fees
received and date of
receipt (persons carrying on
medical profession)
• Details of stock of drugs,
medicines, and other
consumables used (persons
carrying on medical profession)

44. THANKING YOU