GST Registration – Multiple Scenarios

The Goods and Services Tax (GST) regime in India has simplified the indirect tax system, as all major taxes are under a single umbrella. But as businesses grow or diversify their operations, they often become confused about whether they can hold more than one GST registration.

Questions like, Can I have two or more GST numbers under the same PAN? Can I have more than one business under the same address? Or do I require different GST numbers per state? are increasingly common.

This blog describes all the multiple registration requirements under GST, same address, same state, and different states, their legal requirements, eligibility, process, and compliance requirements.

Basics of GST Registration

All businesses having a turnover more than the set-out threshold are required to register under the Central Goods and Services Tax (CGST) Act, 2017.

1. The limit is Rs. 40 lakh for goods and Rs. 20 lakh for services (Rs. 20 lakh and Rs. 10 lakh respectively in special category states).
2. Registration is state-specific and is linked to the permanent account number (PAN) of the entity.

Essentially, a single PAN may contain more than one GST registration, but each registration should adhere to the particular regulations that exist in Section 25 of the CGST Act and Rule 11 of the CGST Rules, 2017.

Legal Provisions Governing Multiple GST Registration

Section 25(1) of the CGST Act, 2017

Each individual who is obliged to register under GST is required to acquire a different registration in the respective state or union territory in which a place of business is operated.

Section 25(2) of the CGST Act, 2017

An individual with more than one business vertical within a given state or union territory can also receive different registrations for each vertical under specified conditions.

Rule 11 of the CGST Rules, 2017

This regulation establishes the process and the criteria for the acquisition of separate GST registrations of multiple places of business or different verticals with the same PAN card.

Scenario 1: Multiple GST Registrations at the Same Address

In others, two or more business entities can share the same physical address, which leaves them in a position to question whether they could be allowed to be registered separately under GST or not.

To some extent, the GST law does not forbid multiple registrations in a single address under some conditions:

1. Every business shall possess an individual identity under the law, i.e., a separate partnership firm, LLP or company registered under the Companies Act.
2. Financial institutions should have their own PAN card, bank account and should have their own books of accounts.
3. The evidence of address must convincingly show independent use of space, such as independent rental agreements or NOC with the landlord referring to separate units or separate partitions.

Therefore, multiple GST registrations may be registered at the same address, though only in cases where the parties are not legally dependent. In case of a single entity that prefers to have more than one GST number to be registered in the same address, one can only have it so when the various business verticals have different accounting and functional separation as required in Section 25(2).

Scenario 2: Multiple GST Registrations in the Same State

In cases where a business entity has various places of business or business activities in a single state, the business entity might be required to have a number of GST registrations in the state.

An example of this would be a company where one department is in the manufacturing business and another is in the trading business within the same state, such as Georgia, and they can seek separate registrations.

Eligibility Conditions

1. The company should possess different verticals or places of operation in the state.
2. Each of the registered units should have separate books of accounts.
3. Branch-to-branch supplies between such GSTINs of the same PAN are subject to treatment as taxable supplies and are subject to GST.

Practical Advantages

A variety of registrations within the same state assists in easing the compliance, division-based taxation, and effective ITC tracking. It also, however, raises the GST returns and compliance requirements.

Scenario 3: Multiple GST Registrations in Different States

A business must be registered separately in each state or union territory where it operates.

This is mandatory since GST is a destination-based tax, administered by individual states, which control transactions within their borders.

For example, a firm with branches in Karnataka, Maharashtra, and Delhi has to register three times under GST, once in each state.

Key Implications

1. The registration of every state is a separate taxable entity.
2. Each GSTIN has to have separate returns and compliance returns (GSTR-1, GSTR-3B, and Annual Return).
3. Input Tax Credit (ITC) is not cross-utilisable across GSTINs across states.
4. Supply between such registrations of one state to another is regarded as a taxable transaction under the IGST Act.

Therefore, various state registrations are not voluntary but mandatory in case of being in the business across two or more states.

Scenario 4: Multiple GST Registrations using the Same PAN Card

Depending on the business model, there can be numerous GST registrations on the same PAN, by the same state, or even address.

The GST law considers each such registration to be a separate person, which implies:

1. Both are required to keep different books, invoices, and taxes.
2. ITC cross-crediting of ITC is prohibited.
3. All of the GSTINs are able to pay tax, credit, and issue invoices independently.

Thus, although legally allowed, having more than one registration with the same PAN adds complexity to the operation and compliance requirements.

Conclusion

The GST Act provides businesses with the flexibility to hold more than one registration, depending on their structure and how they operate. It might have the business operations at the same address, state, or states, but it is the differentiation of business operations and their compliance that matters.

However, keep in mind that multiple registrations create new compliance requirements, different tax payments, and reporting. This is why companies should evaluate their business needs and discuss their options with a professional (legal or tax) before applying to ensure compliance and efficiency in the GST regime.