GST expert K.S. Hariharan provides insights on the duration for which records should be kept under GST law, addressing key aspects of record retention and assessment timelines.
Q: How long should books of account be kept under GST law?
According to the GST law, books of account should generally be maintained for a period of six years from the due date for filing the annual return. For businesses, this period starts from the due date of the return for a specific year. For example, the due date for filing the annual return for 2017-18 was 5th February 2020. This means that the books for 2017-18 should ideally be retained until at least 5th February 2026, unless there are other specific circumstances.
Q: Can assessments for 2017-18 still be made now? Is there a cut-off date for this?
There is a time limit for assessments under GST. If there are errors related to 'Demand and Recovery' in the returns filed, and the taxpayer is found to have made mistakes unintentionally, the finalisation of assessments for the financial year 2017-18 was to be done by 31st December 2023. After this date, no further assessments should be made under Section 73 of the GST Act.
However, if the tax officer suspects that the taxpayer has filed returns with fraudulent intent, such as willfully concealing information, then the tax for 2017-18 must still be finalised by 5th February 2025 under Section 73. It’s also important to note that if an assessment is to be made by 31st December 2023, the taxpayer should have been notified at least three months in advance, which means by 30th September 2023.
Q: What happens if the taxpayer’s assessments are subject to appeal?
If there are any appeals related to the assessment orders, the books should be retained for six years after the date of the appeal order. This extends the retention period depending on the progress of the appeal.
Q: In case there are no appeals, is the six-year retention period still applicable?
Yes, if there are no appeals, the taxpayer is still required to keep the books and records for at least six years from the due date for filing the annual return. This period helps ensure that the records remain available in case of any future inquiries or reviews under the GST law.
{K.S. Hariharan is an advocate practising in the Kerala High Court who provides advice on business laws, including GST. He is also the founder of K.S Hariharan & Associates and the author of the book 'GST Niyamangal Malayalathil' (GST Laws in Malayalam)}
