GST Demand  if goods or services not accounted for or there is shortage

By | September 8, 2018
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(Last Updated On: September 8, 2018)

GST Demand  if goods or services not accounted for or there is shortage

Keeping records under GST is most important task.If records of goods and services supplied and received is not kept as per provisions of GST Act , then there would be serious penalties under GST act.

Video Lecture if GST Records are not kept

Relevant Portion of section 35(1) of CGST Act.

Accounts and other records .

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 goods or services 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:[ Refer Rule 56 of CGST Rules 2017 Maintenance of accounts by registered persons]

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.

Relevant Portion of section 35(6) of CGST Act.

Subject to the provisions of clause (h)of sub-section (5) of section 17 , where the registered person fails to account for goods or services or both under section 35(1) of CGST Act, the proper officer shall determine the tax payable on such goods or services as if such or services or both have been supplied by such person. Provisions of sections 73 and Section 74 will apply mutatis mutandis for determination of such tax .

Comment : “Account for “  Should not mean that the registered person failed to make entry in its books of accounts. It should only means that assessee failed to support his claim with relevant documents.

Section 73 Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful misstatement or suppression of facts.
Section 74Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts.

Superintendent of Central Tax has been designated as ‘proper officer’ for the purpose of raising demand CBE&C circular No. 3/3/2017-GST dated 5-7-2017 [State Government will prescribe ‘proper officer’ for purpose of SGST in the respective State].

Relevant Portion of section 17 (5)(h) 

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—

…………..

(h)goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and

Comment

if you misssed GST Records then

  1. You are required to Pay GST (along with Penalty and Interest )
  2. You will not get Input Tax Credit

Suggestions

Alsways keep origional Copies of

  • invoices,
  • bills of supply,
  • delivery challans,
  • credit notes,
  • debit notes,
  • receipt vouchers,
  • payment vouchers and
  • refund vouchers.
  • Stock Details : pening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample and the balance of stock including raw materials, finished goods, scrap and wastage thereof.
  • separate account of advances received, paid and adjustments made thereto

 Relevant Study Material on GST

Topic wise Study Material on GST Act of India

Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source

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