In 2011, introduction of Goods and Services Tax (GST) was mentioned by the Union Finance Minister in his budget speech, but its implementation was delayed due to lack of consensus among the states and center on aspects relating to limiting fiscal autonomy of the states. However, it is expected to be implemented most probably by 2016. As soon as it is implemented, there would be a requirement of proper accounting system. But how far are we prepared towards that end from an accounting point of view? This paper focuses on those aspects. In short, GST becomes payable as soon as there is a transaction of goods or services. But how it can be recorded precisely without the help of any prescribed register is to be carefully examined. Moreover, the idea of reverse taxation further adds to the complication. As GST has not yet been introduced, it is not clear what would be the exact nuances of law in this regard. However, in this paper, the service tax rules and central excise rules have been taken as the base for depicting the transaction.

While presenting the Union Budget 2007-08, the then finance minister P Chidambaram had announced that Goods and Services Tax (GST) would be introduced from April 1, 2010, to supplement the existing Value-Added Tax (VAT) system in India, envisaging a taxation system where GST can be unified in a comprehensive manner to ease out the tax structure which has been considered problematic primarily due to the ‘cascading effect of taxes’ where an item is taxed more than once from the production to the final retail sales/ consumption stage in the indirect tax regime.

The sales tax, VAT, central excise, etc., all will be a part of history soon after the implementation of GST. Along with these, the statutory records prescribed under these laws will also vanish. No more tussle between sale of goods and sale of services. That would usher in a new era where the entire liability would have to be accounted for in a uniform way.

Accounting Research and Audit Practices, Accounting System, Goods and Services Tax (GST) , Money Account, Control Ledger, Accrual Basis, Accounting, Regime, Prologue.