CBEC clarifies regarding maintenance of books of accounts vide Circular no. 23/23/2017

CBEC clarifies regarding maintenance of books of accounts vide Circular no. 23/23/2017

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.

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Circular No.23/23/2017-GST

F. No. 349/58/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs GST Policy Wing

New Delhi, dated 21st December, 2017

To, The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /Commissioners of Central Tax (All)The Principal Director Generals / Director Generals (All) Madam/Sir, Subject: Issues in respect of maintenance of books of accounts relating to additionalplace of business by a principal or an auctioneer for the purpose of auctionof tea, coffee, rubber etc.- regarding 1.Various communications have been received regarding the difficulties being facedby a principal and an auctioneer in relation to maintaining books of accounts at each andevery additional place of business related to stock of goods like tea, coffee, rubber, etc.meant for supply through an auction. Therefore, in exercise of the powers conferred undersection 168 (1) of the Central Goods and Services Tax Act, 2017, for the purpose ofuniformity in the implementation of the Act, it has been decided to clarify this matter. 2. As per the first proviso of section 35(1) of the Central Goods and Services Tax Act,2017 (hereinafter referred to as the CGST Act) both the principal and the auctioneer arerequired to maintain the books of accounts relating to their additional place(s) of businessin such places. It has been represented that both the principal as well as the auctioneer may be allowed to maintain the books of accounts relating to the additional place(s) of businessat their principal place of business itself. 3. The issue has been examined. In exercise of the powers conferred under section 168(1) of the CGST Act, for the purpose of uniformity in the implementation of the Act, it ishereby clarified that -

(a) The principal and the auctioneer of tea, coffee, rubber etc. are required to declarewarehouses where such goods are stored as their additional place of business. Thebuyer is also required to disclose such warehouse as his additional place ofbusiness if he wants to store the goods purchased through auction in suchwarehouses.

(b) Both the principal and the auctioneer are required to maintain the books ofaccounts relating to each and every place of business in that place itself as per thefirst proviso to sub-section (1) of section 35 of the CGST Act. However, in casedifficulties are faced in maintaining the books of accounts, it is clarified that theymay maintain the books of accounts relating to the additional place(s) of businessat their principal place of business instead of such additional place(s).

(c) Such principal or auctioneer shall intimate their jurisdictional proper officer inwriting about the maintenance of books of accounts relating to additional place(s)of business at their principal place of business.

(d) Further, the principal or the auctioneer shall be eligible to avail input tax credit(ITC) subject to the fulfilment of other provisions of the Act and the rules madethereunder.

4. It is further clarified that this Circular is applicable to the supply of tea, coffee,rubber, etc. where the auctioneer claims ITC in respect of the supply made to him by theprincipal before the auction of such goods and the said goods are supplied only throughauction. 5. It is requested that suitable trade notices may be issued to publicize the contents ofthis Circular. 6. Difficulty, if any, in implementation of the above instructions may please bebrought to the notice of the Board. 7. Hindi version would follow.

(Upender Gupta)

Commissioner (GST)