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Records of goods lost, stolen, gifted amust under GST draft rules

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Entities will have to keep records of goods lost, stolen, destroyed and given as gifts or free samples under the goods and services tax (GST) regime, expected from July 1.
Complying with the “accounts and record” draft rules, put in public domain on Wednesday, will add to the compliance burden of industry.
“Every registered person …shall maintain accounts of stock in respect of each commodity received and supplied by him, and …particulars of the opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples and balance of stock, including raw materials, finished goods, scrap and wastage thereof,” the rule said.Each volume of books of account maintained by the registered person should also be serially numbered.
Excise,a production based tax, was to be subsumed under GST, which is a supply based tax.Every registered person manufacturing goods will have to maintain monthly production accounts.
They will now have to show quantitative details of raw materials or services used in manufacturing and the quantitative details of the goods so manufactured, including the waste and byproducts. “Keeping the accounting records look quite onerous on the industry with just two months to go,” said Pratik Jain, leader, direct tax, PwC.
“It will be a big challenge.They will also need to keep accounts of monthly production, despite moving away from excise to the supplybased GST regime.” These excise related record keeping will apply toaservice provider, too, requiring the service industry to maintain accounts showing quantitative details of goods used in the provision of each service, details of input services used and the services supplied.

Business Standard New Delhi, 21st April 2017

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