Best Way to Manage Books of Accounts When You Have Multiple GST Registration (GSTIN)

18 Nov Best Way to Manage Books of Accounts When You Have Multiple GST Registration (GSTIN)

Bookkeeping is an essential component of managing a business properly. However, bookkeeping should be in accordance with the local laws and regulations for the company to be compliant with taxes and other levies. Accounts and bookkeeping allow business owners to monitor, analyze and control their cash flows and financial transactions.

As per GST Act, all GST registered business should maintain the books of accounts and records for at least a period of 6 years. If you have multiple GST registration, you maintain it for each of the GSTIN.

The importance of bookkeeping in GST
A business should know precisely how much money it is transacting and the details of each transaction. The maintenance of accounting records is essential for the business to accurately generate invoices, bills, and accounting reports. However, another vital use of bookkeeping is to keep records in order to compute the taxes and other dues that are to be paid to the authorities and government agencies. A company that does not maintain proper records will not be able to maintain compliance and is more likely to default or file faulty returns and face penalties or fines.

Bookkeeping is also essential to maintain a record of accounts receivable and as well as accounts payable and the amounts that are due to be paid to others. Both these amounts have tax components that the issuer of the invoice has to record in order to pay taxes correctly.

Best practices businesses can embrace to manage their books with multiple GSTIN
Companies with a single location or office usually have one GSTIN making it simple enough to manage the accounts and file GST with that single GSTIN. However, when there are multiple locations, the company may have to apply for multiple GST registration for each location and maintain their books of accounts accordingly. When the locations are in different states or union territories, opting multi GSTIN is mandatory. An individual with two very different businesses within the same state or union territory may also apply for an individual GSTIN for each of the business vertical.Maintaining accounts for multiple GSTINs involves compiling the GSTIN filing statements/returns separately. This has a significant impact on how one should manage books of accounts.

Considering the multi-GST registration, there are two ways in which books can be maintained that facilitate GSTIN-wise reporting.