Legal requirement procedure and it importance in GST

Legal requirement for maintenance of records:

Legal requirement for the maintenance of records are legally prescribing under the Income Tax Act. To excise the laws, GST registration is very essential one. Central tax procedures are also very helpful one for the implementation of the record maintenance in the proper way. The importance of proper records can be judged from the fact that in scrutiny assessment. It is verifies through the appointing officer it need to clear one. Otherwise, it could easily reject one. However, we are concern here only with two branches of taxation laws, namely ITR (Income Tax Return) filing and GST return filing.

Legal requirement procedure and it importance in GST

Legal requirements under Income Tax:

Sec 44 A of the Income Tax Act and GST registration maintenance properly require the documents for all the profession. It can be anything like legal, medical, Engineering or architectural profession. Board in the official gazette to keeps and maintain such books of accounts and other documents. As may, enable the assessing officer to compute total income as sales are reflecting in the GST filing. No separate records are requiring in the GST registration. But it is very essential one for the improvisation of the business in overall sense. Once a memoranda is receiving from the branch offices at the time of service tax process.

Notes on maintenance:

In GST return filing, a method adopting through the assesse should be compatible with the nature of the business of the assesse. So, that the correct profit submits for the time of record submission. Stock valuation should do properly. Sales and purchase should be verifiable from the supporting and records. Entries related to expense supporting through the proper voucher. Books of account should write regularly and kept in up to date. Sub rules of the GST act and Income Tax helps a lot for the understanding of the laws and procedures. GST registration is the base to promote the business in single state to other states.

Inventory and stock audit importance in the Goods and Service Tax

Legal requirement and procedure of 6F:

Sub rule 4 of rule 6F provides that the aforesaid books of accounts and documents should be keep and maintaining under a person at the place where he is carrying on more than one place for his profession. On such situation each state require the separate GST registration. Business admin need to maintain separate books of accounts in respect of each place where the profession is carried on. Such books and documents may be kept and maintained at the respective places. Small and medium businesses are easily free from the clutches of the GST rules and norms. About forty lakhs turnover comes into the fence of the GST return filing procedure.

Powers of CBDT:

The particular section of the GST registration has given power to the Central Board of Direct Taxes. It gives the details about the books of accounts and documents to be maintained. According to rule, 6F has been framed which elaborates the requirements of the account. Gross receipts do not exceed the prescribed limit in any one of the three preceding years. The proviso cannot be construing it mean that if the gross receipts exceed the prescribed limit in any one of the said years the books are legal requirements need to maintain properly for Income Tax filing and GST return filing. CBDT frequently monitor all the records as a meticulous process.

Legal requirement of mercantile system:

Under the mercantile system, income and expense of goods and service need to be noted properly without any error. It is very helpful at the time of GST registration. Holding the records of the yearly maintenance is crucial one for the annual filing and other legal compliance. Both the profit and expense need to be playing the enormous role in the mercantile system. Whether it is a private limited company registration or other forms the profit of the company is calculating through the mercantile system. Maximum it is not realising in the cash procedure. Previous year records are the mostly considerable one. GST filing cares all the meticulous details in the section of the accounts.

Cash system:

System of accounting procedure following the two ways. As same as legal requirement cash system is crucial one. Afore said mercantile system and cash system. As per the norms of the GST registration, the cash system is lacking its importance. Under the cash system of accounting revenue and expenses are recording only sum of the amount is received or paid. For instance income receiving from previous year it is calculating as the taxable income. It is not effective in the GST registration regime but only in the Service tax regime. Income under cash system of accounting is therefore, excess of receipts over disbursements during the financial year proceeding. It is always careful one for the following of the cash system.

Legal requirement- revenue receipts:

As per the legal requirement receipts are two types. Capital receipts and revenue receipts. Capital receipts are exempt from taxation. GST registration is useful but the tax deduction is not effective one on such bills. As the act does not define the terms capital receipts and revenue receipts one has to depend upon natural meaning of the concepts. Like receipts the expenditure processing through an assessed also follow the same two types. They are namely capital expenditure and revenue expenditure. They are getting essential importance in the Income tax filing especially the revenue expenditure is getting its crucial role in the GST return filing. Hope all these ideas will clear out the importance of the legal documents.


GST registration is now the entrance to the opening of the business. Initiation of the business requires the basic proofs for the wellness of the business. Cascading effect of the business and trading processes are completely eliminating in the world of business. Regulate Value Added Tax is partial one. It is certainly differ from state to state. Reduction of logistic cost is the major benefit in the proper registration process.  As per the necessity of the business the tax percentages are easily reforming in the GST registration. Operational cost and all over business enlargement is very favourable one.


Solubilis is one the leading GST registration consultants in Coimbatore and Tirupur. They are offering the effective registrations in the field of company registration, trademark, Barcode registration, Legal metrology certification. More and more very useful certification of the ISO certification is easily getting through the expertise team of Solubilis. GST registration is specially handling through the GST practitioner. For more details to know just click here.

You may also like...

Leave a Reply