Keeping pace with the July 1 roll-out for the goods and services tax (GST), the government on Wednesday unveiled three more draft rules related to account and records, advance ruling, and appeals & revision, respectively. Experts said that while taxpayers would maintain all account and records electronically, certain requirements in the rules could be cumbersome, especially for smaller taxpayers. The new draft rules for accounting and record-keeping require maintenance of trail of each deleted or edited entry in electronic records. While this is supported by major enterprise resource planning (ERP) software, complying with this may be a major challenge for desktop software, which allow removal of entries or details, Preeti Khurana, chief editor of Cleartax.com, said. She added this may pose compliance challenge for small businesses which may be using a readily-available, basic accounting software.
“This log of deleted or edited entries could pose a serious challenge when it comes to explaining deleted or edited entries to tax officers,” Rakesh Nangia, managing partner, Nangia & Co, said. He also said that while manufacturers are understandably required to keep a record of quantitative details of raw materials or services used in the manufacture including details waste and byproducts, the same set of accounting rules will now apply to the service provider.