Is it possible to obtain more than one GST Number in a single State or Union Territory (UN)?
In India, any business entity falling above the prescribed threshold limit of Rs 20 lakh as annual turnover has to get its business registered under the GST legislation. Registration under GST comprises of obtaining a 15 digit unique identification number GSTIN encrypted with PAN (Permanent Account Number) and State code of applicant.
As government has made the allotted PAN compulsory to apply for GST registration, it has also granted an opportunity to leading venture ideas to expand their business with two or more state divisions, each with a unique GST number registered with a single PAN of the same applicant.
The following provisions were made in the law for multiple GST registrations:
Section 25(1) CGST Act, 2017 – Every Person shall apply for GST registration in every State or Union territory in which he/she is liable to register.
This means if you carry your business from two different locations, you need to obtain a separate GST registration for each individual location.
For instance, a person operating a manufacturing business in Kolkata and have a subsidiary business office in Delhi have to obtain a separate GST registration for each individual state – one for Kolkata and one for Delhi. Also, the same PAN can be used to apply for registration in both states.
Section 25(2) CGST Act, 2017: Person carrying on business with multiple business verticals in a single State or Union territory may be granted a separate GST registration for each separate business vertical subjected to specified conditions and rules therein.
Business Vertical (Section 2 (18) CGST Act, 2017)) – A “business vertical” means a distinguishable component of an enterprise which is engaged in supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals.
This means two distinguished businesses can be operated with multiple GST registration within same state or Union territory applied with the same PAN of the applicant. These verticals are required to follow certain provisions and rules as defined in section 25.
The above section further explains the following provisions to consider for new vertical registration under GST other than registered verticals:
- The nature of goods and services.
- The nature of production process followed.
- The type or class of customers for goods and services.
- The methods used to distribute the goods or supply of services.
- The nature of the registered entity and the regulatory environment (wherever applicable) including insurance, banking, and public utilities.
Rule 11- CGST Rules, 2017 – The law also provides certain rules for seeking separate GST registration for separate business verticals within the same State or Union Territory. Rule 11 (1) further provides that to obtain registration with respect to a new vertical:
– Such person should have more than one business vertical as suitably complying with definition stated under section 2 (18) of the act.
– The vertical option by a taxable person shall not be granted registration under section 10 (composition levy) if any other business vertical of the same person is already registered under
Section 9– all separately registered verticals of such person shall pay tax under the act on the supply of goods or services or on both made to other registered business vertical of such person and to issue an invoice for the same.
Note: Where any business vertical of any person becomes ineligible to pay tax under section 10, other business verticals of the said person shall also become ineligible to pay tax under GST.
Rule 8(1), CGST Act 2017 – Person having business unit registered under Special Economic Zone or being an SEZ developer shall have to make separate application as a vertical to be identified outside Special Economic Zone for separate GST registration.
More than one GSTIN can be obtained only if a person carries business in two or more States or Union Territories or carries the registration process as multiple business verticals in a single State or Union Territory as the case may be.
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