GST: Obtaining More Than One GST Registration under One PAN

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GST: Obtaining More Than One GST Registration under One PAN

One of the common questions by businessmen is whether more than one GST number can be obtained in the name of one business. There is a restriction on number of PAN. Is there any restriction on the GST number also? Whether one PAN can have various GST number? Even in one State, whether more than one i.e., multiple GST number can be obtained?

At present, any business having turnover exceeding the he prescribed threshold limit (of Rs 20 lakh, or 40 Lakh or Rs. 10 Lakh) as annual turnover are duty bound to operate with GST number only. In short, turnover above prescribed limit is required to be carried out by GST number only.

As all know, GST Registration comprises of a 15 digit unique identification number GSTIN encrypted with PAN (Permanent Account Number) and State code of applicant. The process of obtaining is simple and easy and can be done by the taxpayers directly as well without the help of the consultants. It may be noted that having PAN is compulsory for getting GST registration.

Though person cannot have more than ONE PAN, this is not so for GST registration. A person can have multiple GST number as well.

GST Act enables business houses to widen their businesses by having two or more state divisions with each one having a separate and unique GST number registered with a single PAN of the same applicant.

Let us know the legal provision in the GST Act.

Section 25(1) CGST Act, 2017 provides that every Person shall apply for GST registration in every State or Union territory in which he/she is liable to register. It means that if a person want to carry your business from two different locations then they need to obtain a separate GST registration for each such individual location. It means that its not a choice it’s a compulsion to obtain separate GST number if he person is operating in other states as well. To illustrate, a person is having a manufacturing plant in Maharashtra and have a other business offices in Karnatka & UP. In such case, such business would be required to obtain 3 separate GST registration for each state, Maharashtram, Karnatka & UP. This can be done by using the same PAN for registration in all the states.

Whether Multiple GST registration number is possible in the same state?

It may be noted that Section 25(2) CGST Act, 2017 has a provision for this also. 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.

What is business vertical?

It is defined in Section 2 (18) CGST Act, 2017) which defines it as under:

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 2 or even more distinguished businesses can be operated with multiple GST registration within same state or Union territory applied with the same PAN of the applicant. All these verticals are required to follow certain provisions and rules as defined in section 25. This section further exemplifies few 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.

Provisions in the CGST Rules:

Rule 11 of the CGST Rules, 2017 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:

  1. Such person should have more than one business vertical as suitably complying with definition stated under section 2 (18) of the act.
  2. 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

It is provided in Section 9 that all such separately registered verticals of one 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.

It has been provided that 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.

It may be noted that under Rule 8(1), CGST Act 2017, every 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.

In short,

  1. More than one GSTIN can be obtained only if a person carries business in two or more States or Union Territories or
  2. Carries the registration process as multiple business verticals in a single State or Union Territory as the case may be.
  3. For only one vertical, only one GST registration is possible. Multiple registrations is not possible if the business have only one vertical.

 

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