Under the new GST system, you may need to file GST reports more often than you did under the old system. But on top of that, you also have to keep records. Here’s what you need to know to stay compliant.
Details on Producing or Manufacturing Goods
If you manufacture goods, you need to keep records of the goods you make. Additionally, if you run a warehouse or transport goods, you also have to keep records of the items that pass through your facility. This means tracking your inventory but also noting what comes in and out of the warehouse. In addition to tracking goods you sell or get paid to transport, you also have to track items that you give away as gifts or samples.
Goods and Services Tax Paid
You should also keep records of all the GST you collect. For instance, if you sell goods to a client, you should keep a copy of the invoice detailing the tax due and the amounts of the goods sold. When you file your monthly GST return, you need these details to complete the form.
Input Credits Earned
One of the best parts of the new GST regime is that you can earn input credits. These are credits you receive for GST you paid to other businesses. To explain, imagine you bought a computer for your business and paid ₹20 in GST. You can claim an input credit worth this amount and use it to reduce the GST that you owe. But again, you need to keep records of these transactions.
Typically, the business that collected the GST from you reports that information to the government on its monthly GST return. Then, the government sends you a document saying how many input credits you’ve earned. You verify the information, make changes if needed, and submit the form to the government. If a vendor hasn’t reported the GST you paid, your records can be essential to supporting your claim.
Where to Store the Records
Generally, you can store GST-related records at your place of business, but if you have multiple locations, you should keep the records at the location related to the transaction. For instance, imagine you have locations in Assam and Bihar. You buy some supplies for your Assam location and pay GST on those supplies. As explained above, you can claim an input credit on those taxes, but to stay compliant, you need to keep the records in Assam. Even if you do most of your accounting in Bihar, you still have to store the records in Assam.
Mistakes happen, and occasionally, you may need to make changes to your records. Under the new GST system, you can’t just write the correct information over the incorrect information. Instead, on paper records, you need to score out the original entry under attestation. This means you should initial the changes and be prepared to explain them if asked. With electronic accounting ledgers, you need to maintain records of every edit you make.
Keeping records is easier when you have the right accounting software, and cloud-based accounting software such as QuickBooks Online can help. In addition to tracking the numbers and organising your records, this program can also help you generate GST-compliant invoices and do multiple other tasks.