Section 35 of CGST Act - Accounts and Other Records
Updated: 15 September 2026
Current Text of Section 35 - Accounts and Other Records
(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-
- production or manufacture of goods;
- inward and outward supply of goods or services or both;
- stock of goods;
- input tax credit availed;
- output tax payable and paid; and
- such other particulars as may be prescribed.
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 the respective places of business. Accounts and other particulars may also be maintained in electronic form in the prescribed manner.
(2) Every owner or operator of a warehouse, godown or other place used for storage of goods, and every transporter, whether registered under GST or not, shall maintain records of the consignor, consignee and other relevant details of the goods in the prescribed manner.
(3) The Commissioner may notify a class of taxable persons to maintain additional accounts or documents for a specified purpose.
(4) If the Commissioner considers that a class of taxable persons cannot maintain accounts in the ordinary manner required by this section, the Commissioner may, for reasons recorded in writing, permit that class to maintain accounts in the prescribed alternative manner.
(5) Omitted with effect from 1 August 2021.
(6) Subject to section 17(5)(h), where a registered person fails to account for goods or services or both in accordance with sub-section (1), the proper officer may determine tax on the unaccounted goods or services as if they had been supplied. The applicable determination provisions are section 73, section 74 or section 74A, as the case may be.
For legal proceedings, always verify the exact statutory wording and the applicable amendment/effective date from the official text.
Meaning and Scope of Section 35
The purpose of Section 35 is to create a verifiable record trail for GST liability and input tax credit. The provision covers not merely financial books but also records that establish the movement, receipt, storage, production and supply of goods and services.
The expression registered person is defined in Section 2(94) of the CGST Act as a person who is registered under Section 25, excluding a person having a Unique Identity Number. The principal place of business is defined in Section 2(89) as the place specified as the principal place of business in the registration certificate.
What Accounts and Records Must Be Maintained?
| Record category | Practical coverage |
|---|---|
| Production or manufacture | Production records and relevant quantitative details for manufacturers. |
| Inward supplies | Purchases and receipts of goods or services, including relevant supporting documents. |
| Outward supplies | Taxable, exempt, zero-rated and other outward supplies, supported by prescribed documents. |
| Stock | Opening balance, receipts, supplies, losses, destruction, write-offs, gifts/free samples and closing balance, where applicable. |
| Input tax credit | ITC availed and supporting tax documents and records. |
| Output tax | Tax payable, tax collected and tax paid. |
| Additional prescribed particulars | Records required by the CGST Rules, including specified supplier, customer and storage-premises details. |
CGST Rules Relevant to Section 35
Rule 56 - Maintenance of Accounts by Registered Persons
Rule 56 expands the statutory record requirements. Among other matters, it requires records relating to imports, exports, reverse-charge supplies and relevant documents such as invoices, bills of supply, delivery challans, credit notes, debit notes and prescribed vouchers. It also contains requirements for stock records, advances, tax and ITC records, supplier/customer particulars, manufacturing accounts, service records and works-contract records.
Entries in manual records should not be erased or overwritten. Corrections are to be made in the prescribed manner. Where records are maintained electronically, the prescribed record of edits or deletions must be maintained.
Rule 57 - Electronic Records
Electronic records require proper backup so that information can be restored after accidental destruction or natural causes. On demand, the registered person must be able to produce relevant records in hard copy or electronically readable form and provide the prescribed information necessary to understand the electronic record system.
Rule 58 - Warehouses, Godowns and Transporters
Persons covered by Section 35(2), including certain unregistered warehouse operators and transporters, are subject to prescribed enrolment and record requirements. Transporters must maintain records of goods transported, delivered and stored in transit, while warehouse or godown operators must maintain records concerning receipt, movement, dispatch and disposal of goods.
Section 35(5) Audit Requirement Was Omitted
Consequences of Unaccounted Goods or Services - Section 35(6)
If goods or services are not properly accounted for under Section 35(1), Section 35(6) permits tax to be determined as though those unaccounted goods or services had been supplied. The provision is subject to Section 17(5)(h), which concerns blocked input tax credit in specified cases involving goods lost, stolen, destroyed, written off, or disposed of by way of gift or free samples.
Following the Finance (No. 2) Act, 2024 amendment, Section 35(6) also refers to Section 74A. Sections 73 and 74 apply to the demand periods specified in those provisions up to Financial Year 2023-24, while Section 74A governs determination for Financial Year 2024-25 onwards.
How Long Must GST Accounts Be Retained?
Section 36 of the CGST Act generally requires records covered by Section 35(1) to be retained for seventy-two months from the due date for furnishing the annual return for the relevant year. Where an appeal, revision, court proceeding or specified investigation is pending, the longer retention rule under Section 36 must be considered.
Practical Compliance Checklist
- Keep books and records linked to every registered place of business.
- Maintain complete inward supply, outward supply, stock, tax and ITC records.
- Keep source documents supporting entries and GST treatment.
- Maintain proper electronic backups and prescribed edit/audit information for digital records.
- Ensure undeclared storage locations do not create record and tax exposure.
- Preserve records for the period required by Section 36 and longer where proceedings require it.
Official GST Resources
For the latest statutory and procedural position, refer to the official resources below: