GST
Penalty for not keeping proper books
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Facts
Failing to keep or retain proper books is a separate offence. The penalty is ₹10,000 or the tax evaded, whichever is higher.
Provisions and law
- Sec 122(1)(xvi), CGST Act 2017Penalty for failing to keep or retain books: ₹10,000 or the tax evaded, whichever is higher
- Sec 35(1), CGST Act 2017Every registered person keeps true and correct accounts of production, stock, inward and outward supplies, ITC and output tax at the principal place of business
Analysis
Sec 122(1)(xvi) covers failure to keep, maintain or retain books. On top of the penalty, missing records make it hard to defend ITC or turnover in a notice. Example: during scrutiny you cannot show a purchase register; ITC of ₹1.5 lakh may be denied and a penalty applied. Simple daily records avoid both.
Conclusion
- Set up the basic registers now.
- Fill them daily, even if briefly.
- Back them up.
- Get a monthly check by your accountant.
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Daily sales and purchase records for GST, cash and UPI
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