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Multiple Registration under one state
In the Staring phase of GST, there is PAN based Registration, but now dealer can be shift from centralized GST Registration in state to multiple registration in state. There is no requirement of vertical business like in earlier act. This amendment is very useful for hotels, Super Markets etc.
Following are the various amendments with respective to Registration which can be applicable from 1st February:
Amendment in section 25 (2):
Section 25, in sub-section (2), for the proviso, the following proviso shall be substituted, namely:––
“Provided that a person having multiple business verticals in a State or Union territory shall be granted a separate registration for each business vertical, subject to such conditions as may be prescribed”.
“Provided that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.”.
The word Business vertical has been removed.
Amendment of Rule 11 vide the Central Goods and Services Tax (Amendment) Rules, 2019
Rule .11 Separate registration for multiple places of business within a State or a Union territory.-
(1) Any person having multiple places of business within a State or a Union territory, requiring a separate registration for any such place of business under sub-section (2) of section 25 shall be granted separate registration in respect of each such place of business subject to the following conditions,
- Such person has more than one place of business as defined in clause (85) of section 2;
- Such person shall not pay tax under section 10for any of his places of business if he is paying tax under section 9 for any other place of business;
- all separately registered places of business of such person shall pay tax under the Act on supply of goods or services or both made to another registered place of business of such person and issue a tax invoice or a bill of supply, as the case may be, for such supply.
(2) A registered person opting to obtain separate registration for a place of business shall submit a separate application in FORM GST REG-01 in respect of such place of business.
(3) The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.
Insertion of Rule – 41A Transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory
(1) A registered person who has obtained separate registration for multiple places of business in accordance with the provisions of rule 11 and who intends to transfer, either wholly or partly, the unutilised input tax credit lying in his electronic credit ledger to any or all of the newly registered place of business, shall furnish within a period of thirty days from obtaining such separate registrations, the details in FORM GST ITC-02A electronically on the common portal, either directly or through a Facilitation Centre notified in this behalf by the Commissioner:
Provided that the input tax credit shall be transferred to the newly registered entities in the ratio of the value of assets held by them at the time of registration.
According to explanation, it is hereby clarified that the ‘value of assets’ means the value of the entire assets of the business whether or not input tax credit has been availed thereon.
(2) The newly registered person (transferee) shall, on the common portal, accept the details so furnished by the registered person (transferor) and, upon such acceptance, the unutilised input tax credit specified in FORM GST ITC-02A shall be credited to his electronic credit ledger.”
Section 25(4) concept of distinct person
A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.
Impact of this clause:
As per schedule –I to Section 7, the activity of supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business will be treated as supply even if made without consideration.
On the basis of above, one can before opting for separate registration above things should be kept in mind and their consequences also The option for the separate registration for separate place of business in same state or in same union territory is optional. Because once you opt for this option additional compliances also required to be comply.