GST Update On Maintenance Of Records At Additional Place Of Business

Section 35 of CGST Act, 2017 states that every registered person shall maintain the prescribed books and accounts at his principal place of business mentioned in the certificate of registration. This section further provides 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. Thus, if any other place is prescribed as another place of business (APOB) in registration certificate of a person, the records will be kept at such places of business

Further, section 143 of the CGST Act prescribes the provisions relating to job work. This section states that a supplier can send the goods for job work to some other premise without payment of tax on satisfaction of certain conditions. This section also states that the said goods after job work can directly be supplied from the premise of job worker if that premise of job worker is added as APOB in his registration certificate. APOB is not required if the job worker is himself registered. Thus, if the supplier wants to directly supply the goods from unregistered job worker’s premise, he is required to add his premise as another place of business in registration certificate. Further, sub-section 2 to section 143 states that the responsibility for keeping proper accounts for the inputs or capital goods sent on job work shall lie with the principal.

Reading the two provisions together, section 35 and 143 of CGST Act, it is clear that once added as APOB, proper accounts should be kept even at the premise of job worker. Since the job worker is not registered, liability has been casted on the principal supplier to maintain the records at job worker’s premise. This fact is further affirmed by rule 1(7) of the GST Rules pertaining to maintenance of accounts and records. This rule reads as follows:-

“(7) Every registered person shall keep the books of account at the principal place of business and books of account relating to additional place of business mentioned in his certificate of registration and such books of account shall include any electronic form of data stored on any electronic device.”

The analysis of above rule also makes it clear that it is the responsibility of principal supplier to maintain the records of job worker if his premise has been declared as additional place of business in his registration certificate. However, neither this rule nor any of the above discussed provisions clarifies what all records are to be maintained at job worker’s premise by the principal supplier. Logically, it should be the records or pertaining to supplies made by him to job worker. But since neither the above said rule nor section 35 or 143 clarifies it, ambiguity does exist and department may proceed against the principal supplier against any anomaly found relating to other transactions too carried out at the premise of said job worker. Government should clarify the same before any litigation arise.

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GST Update On Maintenance Of Records At Additional Place Of Business

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