# Period of Retention of Accounts — Section 36

## The Basic Rule

Records must be retained for 72 months (6 years) from the due date of furnishing the annual return of the FY to which the records relate.

## When Litigation is Pending

If the registered person is involved in an appeal, revision, investigation, other proceeding, or court case, records must be kept till the LATER of:

1 year from the disposal of such appeal/proceeding, OR
72 months from the due date of the annual return of the relevant FY.

The two-step rule ensures records survive whichever event runs longer.

Worked example

### Example 1

Example — ABC Ltd.

A fake-ITC matter for FY 2022-23 was under appeal. The appeal was disposed on 30 June 2029. Until when must ABC Ltd. retain records relating to FY 2022-23?

Computation:

72 months from due date of annual return for FY 2022-23 = 72 months from 31 Dec 2023 = 31 Dec 2029.
1 year from disposal of appeal = 1 year from 30 Jun 2029 = 30 Jun 2030.
Later of the two = 30 June 2030.

Answer: ABC Ltd. must retain records relating to FY 2022-23 up to 30 June 2030.

⚠️ Common exam mistakes

Counting 72 months from the end of the FY instead of from the due date of the annual return.
Picking the earlier date instead of the later when litigation is pending.
Destroying records as soon as the appeal is over — must still satisfy 1-year-from-disposal rule.
Forgetting that 'other proceeding' includes ongoing investigations, not just formal appeals.

Bare-Act text Section 36 · CGST Act, 2017 · click to expand

Every registered person required to keep and maintain books of account or other records in accordance with the provisions of sub-section (1) of section 35 shall retain them until the expiry of seventy-two months from the due date of furnishing of annual return for the year pertaining to such accounts and records.

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