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Posted on November 20, 2021
Multiple GST Registration in the Same Address
This is one of the major points of discussion of this article. As there is no direct section or rule or allied provisions provided by the GST Act or GST Rules regarding the allowing of registration under GST in the same address to multiple persons, we shall discuss the same keeping in light the following namely, ‘Space lance Office Solutions Private Limited – 2019(8) TMI 817 – Authority for Advance Ruling – Kerala’.
The applicant in this case is engaged in the business of sub-letting co-working spaces to multiple entrepreneurs who are running start-up businesses belonging to the service industry majorly. The landlord of the building has permitted and given the applicant the necessary space for being sub-let to multiple persons or GST consent for these persons to take registration under GST. The applicant provides the persons utilizing his co-working space with the following:
– A land phone number
– A fax numbers
– High-speed internet connection
– Air conditioners or AC
– Housekeeping staffs
– Drinking water facility
– Power backup arrangement
– Receptionist of front desk officer
– Meeting and Conference Room
– Letter, courier, and postage handling staff.
Along with this each person or entrepreneur will also be provided with dedicated desks, chairs, and distinctly identifiable space. These persons also maintain their records financial or otherwise in electronic form in the co-working space and the same can be easily accessed from the co-working space at any time.
The question here is whether, if the entrepreneurs utilizing this co-working space can take registration under GST in the same address, provided they comply with all the rules of GST pertaining to the principal place of business. It shall also be noted that as these entrepreneurs using the co-working space are belonging to the service industry, there are no stocks or inventory being maintained in the entity or space.
Most of them have opted for a co-working space as they all are start-ups and find it difficult to rent office spaces due to the high-cost involvement and also the incurrence of fixed expenses which again is costly. Utilizing co-working space helps them reduce administration and establishment costs for the office. The problem that arises here is their inability to take registration under GST, as the application gets rejected on the statement that, there is another entity registered in the same address. The companies here or persons here will be having the same address, electricity bill, and such other copy of bills but their desk or the suit number used by them will be different. As they are different companies, they maintain their financial records, bills, and vouchers in electronic or physical form and separately mandating them to take registration under GST for the proper furnishing of the same and also utilizing their ITC (Input Tax Credit). Hence, they should be allowed registration under GST using the same address.
the Authority of Advance Ruling after considering all the points furnished by the applicant, the world is changing every day where traditional office setups are also getting changed now. And co-working spaces are one major requirement and supporting element for start-up companies, allowing them to open their office spaces with lower investment. Co-working is a community building where people might share office spaces for running different businesses. The Authority also found this as a setup that makes available basic necessities to the business owners, freelancers who are traveling or otherwise, and also small business owners and businesses which are running on a remote basis.
They also held that there are no direct provisions or rules under GST which is prohibiting such registration using the address of shared office space provided the landlord or property owner is permitting such sub-letting of space as co-working space. There is also proper demarcation of the desk and suit number for each business owner. And the PAN held by the entrepreneur or business entity is the basis of identification for any business under the GST for registration. So, the person or the applicant shall upload the copy of the agreement between the lessor and lessee along with the copy of the agreement between the lessee and the sub-lessee as proof of principal place of business. Along with this, there shall also be a copy of electricity, water, or such other utility bill incurred by the specific desk number also furnished. Once all these are furnished properly there shall not be any ground for rejecting the application for registration and the assigned GST number shall be displayed by the businessperson at the prominent location and also ensure that the books of accounts and other documents are maintained at this principal place of business.
Thus, we can conclude that the registration can be taken in the same address provided there is a proper copy of the agreement and the demarcation available to the applicant in such a common address.