Accounts and other records
Section 35, CGST Act
Straight from CBIC
Official source, not a summary of a summary
Full text included
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Amendment history
See what changed, and when
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Section 35 requires every registered person to keep true and correct ACCOUNTS and RECORDS at the principal place of business – of production, inward/outward supplies, stock, ITC, output tax and more; the earlier mandatory audit for large turnover was removed.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Records must be kept at EVERY place of business named in the registration, not only the principal place – a common gap in a multi-location business.
Rule 56 requires stock records, an account of advances received and paid, and details of every supplier and customer; a works contractor has extra requirements under Rule 56(14).
Electronic records need a log of every edit and must be restorable from backup (Rule 57); the officer can demand the passwords and the audit trail.
Where records are not maintained, section 35(6) lets the officer determine the tax on the unaccounted goods or services as if they had been supplied – a best-judgment power inside the accounts section.
A transporter or warehouse keeper who is not registered must still enrol in ENR-01 and keep records (Rule 58).
Questions people actually ask
Real questions we get on this provision, answered straight.
Can we keep all our records centrally at head office?+
No. Section 35(1) requires the records of each place of business to be kept at that place; only the ability to access them electronically from there is treated as compliance. Keeping everything at head office with no access at the branch is a contravention, and it weakens any later reconciliation.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
2,144 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(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-
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed: Provided 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: Provided further that the registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed.
(2) Every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed.
(3) The Commissioner may notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified therein.
(4) Where the Commissioner considers that any class of taxable person is not in a position to keep and maintain accounts in accordance with the provisions of this section, he may, for reasons to be recorded in writing, permit such class of taxable persons to maintain accounts in such manner as may be prescribed.
(5) 1 [ **** ]
(6) Subject to the provisions of clause
(h) of sub-section
(5) of section 17 , where the registered person fails to account for the goods or services or both in accordance with the provisions of sub-section (1), the proper officer shall determine the amount of tax payable on the goods or services or both that are not accounted for, as if such goods or services or both had been supplied by such person and the provisions of section 73 or section 74 2 [or section 74A], as the case may be, shall, mutatis mutandis, apply for determination of such tax.
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
SAI AUTO INDUSTRIES v. THE COMMISSIONER CENTRAL GOODS AND SERVICES TAX
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M/s.Shri Mahalakshmi Metal Mart v. The Joint Commissioner of (Appeals) GST
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RAYBAN SUN OPTICS INDIA PVT. LTD. v. THE COMMISSIONER OF CENTRAL EXCISE AND GST JAIPUR I
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What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
date not stated · Omitted
Omitted -(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountan …
date not stated · Inserted
Inserted by section 123 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
Read this with
A provision rarely works alone. These are the ones it points to.
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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