A firm-wide project total is insufficient
Rule 56(14) requires every registered person executing works contracts to keep separate accounts containing the specified customer, inward supply, utilisation, payment and supplier details. This guide concerns an arrangement already established as a works contract; it does not classify every installation or service as one. ICAI April 2026 statutory compilation: CGST Rule 56(14)–(16).
Connect the five record groups
Maintain customer names and addresses; descriptions, values and quantities wherever applicable of goods or services received for execution; corresponding utilisation details; payments received for each contract; and supplier names and addresses. Link entries to source invoices, inward receipts, consumption records and bank entries. A GSTIN or project nickname does not replace the stated particulars.
Receipt, use and cash are different measures
Goods reaching a site are not automatically consumed. Input services shared across jobs need an evidenced allocation. Invoiced amounts need not equal collections, and an advance adjustment is not a fresh cash receipt. Rule 56(14) does not by itself determine time of supply, tax rate, valuation, ITC eligibility or accounting revenue.
Preserve transfers, corrections and access
Document returns and transfers between jobs on both sides; do not allocate a resource twice. Use compatible quantity units and a supported allocation basis rather than an invented statutory percentage. Rule 56(15) permits electronic records authenticated by digital signature; sub-rule (16) connects preservation to section 36 and requires the stated access at related business locations. Retain underlying documents and applicable correction history.
Applicable primary references
ICAI April 2026 statutory compilation: CGST Rule 56(14)–(16)
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Material bridge
Opening 100 bags plus 500 received less 450 used leaves 150 bags. Treating all 500 receipts as use overstates utilisation by 50 bags.
Illustrative example 2: Supplier return
Goods received at ₹3,00,000 less an evidenced ₹40,000 return leave net receipts ₹2,60,000. Preserve both entries; this is not a ruling on GST credit-note treatment.
Illustrative example 3: Shared service
A ₹1,00,000 service is allocated on an evidenced 60:40 basis: ₹60,000 to A and ₹40,000 to B. The ratio is assumed, not prescribed by Rule 56.
Illustrative example 4: Receipts versus adjustment
Opening cumulative receipts ₹2,00,000 plus new bank credits ₹3,00,000 and ₹1,00,000 give ₹6,00,000. Adjusting the earlier ₹2,00,000 advance against a bill adds no cash.
Illustrative example 5: Reassignment
₹75,000 of unused material moves from A to B. A’s ₹3,00,000 allocation becomes ₹2,25,000; B’s ₹2,00,000 becomes ₹2,75,000. Combined ₹5,00,000 is unchanged.
Illustrative example 6: Supplier completeness
Seventeen of twenty supplier records contain complete required particulars. Three need correction. The 85% completion measure is not permission to omit 15%.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm classification | Works-contract basis. |
| 2 | Identify contract | Unique reference and scope. |
| 3 | Record customer | Name and address. |
| 4 | Record suppliers | Names and addresses matched to invoices. |
| 5 | Trace goods received | Description, value and applicable quantity. |
| 6 | Trace services received | Work and allocation evidence. |
| 7 | Record utilisation | Consumption distinguished from receipt. |
| 8 | Reconcile payments | Advances and bank collections. |
| 9 | Control transfers | Both job records and correction trail. |
| 10 | Test production | Authentication, access and preservation. |
Sixteen practitioner FAQs
1. Who is covered?
Every registered person executing works contracts.
2. Does this article classify all construction services?
No. Establish classification independently.
3. Is a firm-wide purchase total enough?
It does not establish the separate contract record.
4. Which customer particulars matter?
Names and addresses of persons on whose behalf work is executed.
5. Are received goods described and valued?
Yes, with quantity wherever applicable.
6. Are input services covered?
Yes, both receipt and utilisation are addressed.
7. Does receipt equal consumption?
No. Support actual utilisation.
8. Are customer receipts separately tracked?
Yes, for each works contract.
9. Does advance adjustment create fresh cash?
No. Separate adjustment from receipt.
10. Are supplier addresses required?
The rule expressly requires names and addresses.
11. Is 60:40 a statutory allocation?
No. It is an assumed evidenced internal basis.
12. Can shared resources be charged twice?
Reconcile totals and actual use to prevent duplication.
13. Can different material units be added?
Use meaningful item-wise units.
14. Are electronic records permitted?
Yes, with digital-signature authentication under sub-rule (15).
15. Does a record entry itself prove ITC eligibility?
No. Apply substantive credit requirements separately.
16. What completes the review?
A contract-to-source-document reconciliation with unresolved differences identified.
Conclusion
Link each works contract to its customer, suppliers, goods and services received and used, and actual payment receipts under CGST Rule 56(14).