Text
The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.
Section 35, verbatim (show)
Section 35
*Section 35. Accounts and other records.-
(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.
*Enforced w.e.f. 1st July, 2017.
1. Omitted -(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.
Provided that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.
By s. 110 of The Finance Act, 2021 (No. 13 of 2021). Brought into force w.e.f. 01.08.2021 vide Notification no.29/2021- C.T. dated 30th July, 2021.
2. Inserted by section 123 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
35(1)(a) to (f) and provisosAccounts and locations
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 ofSection 35(1)(a) to (f) and provisos
The list covers production or manufacture, inward and outward supplies, stock, credit availed, output tax and prescribed particulars. Each additional business place specified in the certificate keeps its own accounts. Electronic maintenance follows the prescribed manner.
Questions to answer on the file8 questions
35(2)Storage and transport duties
shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed.Section 35(2)
The duty reaches warehouse, godown and other storage-place owners or operators and every transporter. Registration status does not limit it.
Questions to answer on the file6 questions
35(3)Additional accounts
The Commissioner may notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified therein.Section 35(3)
The notification identifies the taxable-person class. The additional material serves the purpose specified in it.
Questions to answer on the file3 questions
35(4)Alternative manner
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.Section 35(4)
The Commissioner must consider the class unable to maintain accounts under the section. Written reasons support permission to use the prescribed alternative.
Questions to answer on the file3 questions
35(6)Unaccounted goods or services
Subject to the provisions of clause (h) of sub-section (5) of section 17Section 35(6)
Section 17(5)(h) qualifies the determination. On failure to account under sub-section (1), the officer determines tax as if the unaccounted goods or services were supplied, applying section 73, 74 or 74A with necessary adaptations. Footnote 2 gives no commencement date for the section 74A insertion.
Questions to answer on the file5 questions
Other questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.
Scope the section as a whole
Questions to answer on the file1 question
Where the accounts are kept 35(1) and the first proviso
Questions to answer on the file3 questions
Accounts in electronic form the second proviso to 35(1)
Questions to answer on the file1 question
Sub-section (5), omitted footnote 1
Questions to answer on the file2 questions
Frequently asked questions
Must transporters comply even without registration?
Yes. Sub-section (2) expressly applies irrespective of registration. It requires the prescribed consigner, consignee and other relevant goods details.
Section 35(2)
Where are accounts for multiple registered business places kept?
Accounts relating to each place specified in the certificate are kept at that place. The proviso qualifies the principal-place rule.
Section 35(1), first proviso
What satisfies the true-and-correct standard?
The law does not settle what makes the account "true and correct". That standard also affects the failure-to-account determination under sub-section (6).
Section 35(1) and 35(6)
Amendment history
The CBIC text carries 3 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Provision | Change | Instrument | Effective from |
|---|---|---|---|---|
| the section | enforcement | — | 1 July 2017 | |
| 1 | 35(5) | omitted the sub-section, which had required every registered person whose turnover during a financial year exceeded the prescribed limit to get his accounts audited by a chartered accountant or a cost accountant and to submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents as prescribed, with a proviso excepting departments of the Central or a State Government and local authorities audited by the Comptroller and Auditor-General or by an auditor appointed under any law for the time being in force. The source preserves the omitted words in the footnote. | s.110 of The Finance Act, 2021 (No. 13 of 2021), brought into force by Notification no. 29/2021 - C.T. dated 30th July, 2021[2][3] | 1 August 2021 |
| 2 | 35(6) | inserted "or section 74A" after the reference to section 73 or section 74 | section 123 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024[4] | the footnote gives the amending Act and its date and names no separate commencement notification — flagged |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 2 | 35(1) defined by Section 2 | 35(1) "at his principal place of business, as mentioned in the certificate of registration" |
| Section 17 | 35(6) overridden by Section 17 clause (h) of sub-section (5) | 35(6) "Subject to the provisions of clause (h) of sub-section (5) of section 17" |
| Section 73, Section 74, Section 74A | 35(6) requires Section 73, Section 74, Section 74A | 35(6) "the provisions of section 73 or section 74 or section 74A, as the case may be, shall, mutatis mutandis, apply" |
| Section 36 | Section 36 requires 35(1) | s.36 "required to keep and maintain books of account or other records in accordance with the provisions of sub-section (1) of section 35" |
| Section 44 | the omitted 35(5) requires Section 44 | the omitted words "the reconciliation statement under sub-section (2) of section 44" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this section, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Circulars (6)
| Number | Date | Subject |
|---|---|---|
| Circular No. 246/03/2025-GST | 30 January 2025 | Clarification on applicability of late fee for delay in furnishing of FORM GSTR-9C |
| Circular No. 245/02/2025-GST | 28 January 2025 | Clarifications regarding applicability of GST on certain services. |
| Circular No. 61/35/2018-GST | 4 September 2018 | E-way bill in case of storing of goods in godown of transporter. |
| Circular No. 47/21/2018-GST | 8 June 2018 | Clarifications of certain issues under GST. |
| Circular No. 23/23/2017-GST | 21 December 2017 | Issues in respect of maintenance of books of accounts relating to additional place of business by a principal or an auctioneer for the purpose of auction of tea, coffee, rubber etc. |
| Circular No. 3/03/2017-GST | 5 July 2017 | Proper officer relating to provisions other than Registration and Composition under the Central Goods and Services Tax Act, 2017-Reg. |
Notifications (9)
| Number | Date | Subject |
|---|---|---|
| Notification No. 08/2024-Central Tax (Rate) | 8 October 2024 | Seeks to amend Notification No 12/2017-Central Tax (Rate) dated 28.06.2017 |
| Notification No. 79/2020-Central Tax | 15 October 2020 | Seeks to make the Twelfth amendment (2020) to the CGST Rules.2017. |
| Notification No. 16/2020-Central Tax | 23 March 2020 | Seeks to make third amendment (2020) to CGST Rules. |
| Notification No. 56/2019-Central Tax | 14 November 2019 | Seeks to carry out Seventh amendment (2019) in the CGST Rules, 2017. [Primarily related to Simplification of the Annual Return / Reconciliation Statement]. |
| Notification No. 03/2019-Central Tax | 29 January 2019 | Seeks to amend the CGST Rules, 2017. |
| Notification No. 74/2018-Central Tax | 31 December 2018 | Fourteenth amendment to the CGST Rules, 2017. amended by a later instrument |
| Notification No. 49/2018-Central Tax | 13 September 2018 | Notification amending the CGST Rules, 2017 (Tenth Amendment Rules, 2018). |
| Notification No. 27/2017-Central Tax | 30 August 2017 | Seeks to further amend the CGST Rules, 2017 |
| Notification No. 10/2017-Central Tax | 28 June 2017 | Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument |
Unsettled questions
The words of section 35 do not answer this question. Where one decides a matter on the file, the answer depends on the position taken on it.
- What makes an account "true and correct" under sub-section (1), and therefore what amounts to failing to account for goods or services in accordance with it under sub-section (6)? The section imposes the standard and nowhere says what satisfies it.
See also
- Section 17 of the CGST Act, 2017: apportionment of credit and blocked credits
- Section 73 of the CGST Act, 2017: determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts
- Section 74 of the CGST Act, 2017: determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts
- Section 74A of the CGST Act, 2017: determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onward
- Section 36 of the CGST Act, 2017: period of retention of accounts
References
- Central Board of Indirect Taxes and Customs. "Section 35. Accounts and other records". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 3. Retrieved 17 September 2026.
- The Finance Act, 2021. Cited in CBIC footnote 1.
- Notification No. 29/2021-Central Tax, dated 30 July 2021: Seeks to notify section 110 and 111 of the Finance Act, 2021 w.e.f. 01.08.2021. Cited in CBIC footnote 1.
- The Finance Act (No. 2) Act, 2024. Cited in CBIC footnote 2.
External links
- CGST Act, 2017, Section 35 on the CBIC tax information portal