Keeping correct books of accounts is an essential aspect of a business that is registered under GST in India. If you do not have proper records, you will miss out on input tax credit, get penalized and face difficulties in a GST audit. My Startup Solution, the top Chartered Accountant firm gives you the necessary information to be in line with GST when it comes to your accounting.
The following is a simple, detailed, and sequential guide on how to keep books of accounts that are in compliance with the GST regulation, the importance of it and the best practices that you can implement.
Accurate accounting under GST is not only part of good business practice but also a legal obligation as per the GST Act. As per the CGST Rules (Chapter 7), a registered person is required to keep proper records of inward supplies, outward supplies, stock, and tax liabilities. Not having them can result in:
Therefore, a startup creating the right accounting framework at the outset will be in a position to steer clear of troubles later on.
Every taxpayer registered under the GST regime is required to keep certain accounts and records as per the GST law. Some of the essential records are:
Through the maintenance of these records, your startup will be able to calculate tax liabilities and have audit trails available.
GST accounting imparts to you some special ledgers which are mandatory for you to keep:
These ledgers enable you to reconcile ITC with liabilities and assure that your payments are correct.
These are the compulsory books and records that a business needs to keep as a part of their accounts and records under GST:
To understand and for maintaining proper books of accounts under GST compliance choose My Startup Solution, we are the top GST consultancy service provider for individuals, small business and large enterprises.
Where you keep your books of accounts is equally important:
Such an arrangement keeps your records as a lawful source and resistant to any kind of manipulation.
According to the GST act, it is mandatory to keep your books and records for a minimum period of 6 years counting from the date of filing the annual return.
For example: when your annual return for the financial year 2022-23 is filed on 31st December 2023, then you need to keep these records till 31st December 2029.
If there are any appeals, investigations or confusions, then documents might also have to be kept for an extended period of time, as interval specified.
A large number of businesses are breaking GST rules unintentionally due to their inadequate record-keeping. Below are some of the mistakes frequently made which you should avoid:
Such failures in the account and record maintenance operations under the GST regime can result in the levying of penalties which may include the disallowance of ITC and the payment of late fees.
The non-maintenance or improper maintenance of accounts and records under Goods and Services Tax (GST) may result in the following:
My Startup Solution taking the initiative to maintain records that comply with the regulations, you will be able to steer clear of such difficulties.
Here are the best tips for maintaining GST-compliant books:
My Startup Solution helps to maintain GST books of accounts and reduce your stress.
Maintaining accurate books of accounts for GST compliance is definitely not just a burden imposed by the regulatory authorities. In fact, it is a powerful tool that can assist your business in cutting down costs, making wiser decisions and avoiding legal proceedings. Our services at My Startup Solution is to help startups like you in setting up GST-compliant accounting systems, making the correct software choice and providing team training By implementing best practices, using serially numbered books, maintaining secure digital records, having audit trails and carrying out regular reconciliation, you will be able to fulfill your GST obligations without any worries. For guidance and expert help, call My Startup Solution at +91-7081220800.
It is necessary for the registered individuals to keep the GST documents for six years counting from the date when the annual return is filed.
Input and output ledgers for each tax head (CGST, SGST, IGST), electronic cash ledger and e-liability ledger are the minimum ledgers that have to be maintained by you.
Yes, the electronic records are permissible, however, they should be authenticated and should have a log of changes/deletions.
According to the GST registration, the books should be kept at your main business unit; in case of multiple locations, keep the necessary books at each place.
Incorrect entries must be scored out under attestation; for digital entries, maintain a detailed log before making corrections.
Yes. It is mandatory for you to maintain a stock register which shows the opening stock, receipts, supplies, losses and closing stock.
Not keeping such records can lead to the raising of penalties, the exclusion of the Input Tax Credit and even the estimation of the best judgment by the tax authorities.
Physical copies of the invoices are permitted, electronic invoices or digital records are also considered valid if they are stored securely.
Internal GST audits or reviews, although not mandatory every month by law, are beneficial in locating mismatches and enhancing compliance.
My Startup Solution would be happy to facilitate you in organizing your GST compliant accounting records. Get in touch with us at +91-7081220800. We can make GST compliance easy and smooth by helping you select the software, setting up the registers and training your team.
"Choosing 'My Startup Solution' for my startup's accounting needs was one of the best decisions I made. The team's dedication to accuracy and their personalized approach to my financial situation set them apart. They go above and beyond to ensure I'm well-informed and compliant, allowing me to focus on my business's growth."
"The team at 'My Startup Solution' has been a true partner in my entrepreneurial journey. Their insightful financial guidance and meticulous attention to detail have helped me navigate complex financial matters seamlessly. With their support, I can confidently steer my startup toward success, knowing that my financial matters are in capable hands."
