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
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. Recommended Articles –
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