Section 36 of GST – Period of retention of accounts

Section 36 of GST – Period of retention of accounts . This section provides for the period up to which records and accounts must be retained by the registered person. Everything you want to know about for GST Section 36.

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Section 36 of GST – Period of retention of accounts

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:

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 under Chapter XIX, 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.

Related provisions of the Statute

Section or RuleDescription
Section 35Accounts and other records
Section 44Annual return

Introduction

This section provides for the period up to which records and accounts must be retained by the registered person.

Analysis

Every registered person is required to mandatorily retain the books of accounts and other records until the expiry of 72 months (6 years) from the due date for filing of Annual Return for the year, i.e., 81 months from the end of the financial year pertaining to such accounts and records

For instance, the books of account and other records for FY 2017-18 are to be maintained till 31.12.2024, regardless of the actual date of filing of annual return for the year, considering that the due date for furnishing the annual return is 30.06.2019 (extended due date).

2. This time period is more than the time limit prescribed in Section 62(1) for issuance of order of assessment i.e., 5 years from the due date for filing of annual return or date of erroneous refund (as applicable) in cases of fraud, wilful mis-statement, suppression of facts, etc. (in the above example, the order of assessment shall be issued by 31.12.2023).

3. In case an appeal or revision or any other proceeding is pending before any Appellate Authority or Revisional Authority or Appellate Tribunal or Court, or in case the registered person is under investigation for an offence under Chapter XIX, he shall retain the books of account and other records pertaining to the subject matter of such appeal or revision or proceeding or investigation for a period of one year after final disposal of such appeal or revision or proceeding, even after the expiry of 72 months from the due date for furnishing the annual return.

Where any disputes are involved, then records must be maintained until final disposal of those matters.

Comparative Review

  • Rule 5(3) of Service Tax Rules, 1994 provides that all records shall be preserved for a period of five years immediately after the financial year to which such records pertain.
  • Chapter 6 of the CBEC’s Central Excise Manual obligates every assessee to maintain the records for a period of five years immediately after the financial year to which such records pertain.
  • Different State VAT laws prescribe different time periods for maintenance of records. However, many States prescribed a period of five years.
  • Where the proceedings are pending in appeal, revision etc., the records are generally maintained till the proceedings are finally concluded, though this is not specifically stipulated in the erstwhile laws. In fact, the books and records are required to be maintained till the time frame for revision proceedings stand open and are not barred by limitation of period.

Issues and concerns

Due date of annual return: In the event the due date to furnish the annual return is amended for any reason, the registered person must bear in mind that the requirement to maintain the records would also stand extended accordingly. For instance, say the due date to furnish the annual return for FY 2017-18 is extended to 30-June-2019 for whatever reason, the period of retention would be 30-June-2025 and not 31-Dec-2024.

Frequently Asked Questions

Is a separate time limit for maintenance of records specified where an assessee is involved in any litigation?

In case an assessee is a party to an appeal or revision or any other proceeding before any Appellate Authority or Revisional Authority or Appellate Tribunal or Court, (as an appellant or a respondent), or where he is under investigation for an offence under Chapter XIX, then he shall retain the books of account and other records pertaining to the subject matter of such appeal or revision or proceeding or investigation for a period of 1 year after final disposal of such appeal or revision or proceeding, or for the period specified records u/s 36(1), whichever is later.

Who is responsible for the maintenance of proper accounts related to job work?

The responsibility for the maintenance of proper accounts of job work-related inputs and capital goods rests with the principal.

What action can be taken for transportation of goods without valid documents or attempted to be removed without proper record in books?

If any person transports any goods or stores any such goods while in transit without the documents prescribed under the Act (i.e. invoice and a declaration) or supplies or stores any goods that have not been recorded in the books or accounts maintained by him, then such goods shall be liable for detention along with any vehicle on which they are being transported. Such goods shall be released only on payment of the applicable tax and penalty or upon furnishing of security.

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