Understanding About Separate Registration Required for Branches in Different States

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As per CGST Act, all the suppliers of taxable goods and services should register with GST in the State or Union territory, from the place of taxable supply of goods or services. Furthermore, provisions have been provided in the GST Registration Rules for obtaining GST registration for branches

GST registration should be obtained by a taxable person under GST in each of the State or Union Territory, from where the taxable supply of goods or services is made. For example, if a restaurant operates in the States of Maharashtra and Delhi, then separate GSTIN would have to be obtained for Maharashtra and Delhi.

The applicant can also apply for separate GST registration for branches within a state for businesses having multiple business verticals. To apply for separate GST registration for branches within a State, the entity shall follow the following conditions:

  • Have more than one business vertical. Business vertical means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which are subject to risks and returns that are different from those of the other business verticals.
  • The business must not be registered to pay tax under the GST Composition Scheme.
  • All separately registered business verticals must pay tax on supply of goods or services to another registered business vertical of the same business and issue a tax invoice for such supply.

The entity shall use FORM GST REG-01 for registering businesses with GST. Therefore, any entity or individual applying for GST registration for their branches or separate business verticals within the same state shall apply only through FORM GST REG-01. During the registration process, the applicant shall provide appropriate application and documents for the GST registration.

After submission of the application for GST registration by the applicant, the authorized officer shall verify the application and documents provided by the applicant. After approval the officer shall provide the GST registration certificate within 7 working days. The GST registration certificate would show the principal place of business and additional place or places of business.

No separate GST registration for multiple branches in different states: AAR Ruling

Important facts of AAR Ruling

Company has submitted that they will be importing the said goods at various Indian ports but with Mumbai Head Office/Registered Office at Mumbai GSTIN and after importing the goods the same will be stored at godowns in various states and they want to clear the goods from the warehouses/godowns in the name of their Mumbai Head Office/Registered Office at Mumbai.
Formulated question of law

Whether the applicant can adapt the procedure to raise the Invoice from Mumbai Head office for import received at various ports, located in various states in India and charge IGST from Mumbai to our customers in various state is proper or not?
Analysis by AAR

AAR rules that the present case is related to chapter VI of CGST Act, 2017. As per Section 22 of CGST act, 2017, persons who are liable for registration and as per Section 22 (1) — “Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if………….”

In our case, the place of supply is the location of the importer who is situated in the State of Maharashtra and hence the applicant will be clearing the goods by paying IGST from their GSTIN issued in Mumbai, Maharashtra. Since the applicant will be storing the goods, after import, in various states for further sales, whether that would be interstate or intrastate supply would depend upon the place of supply of goods as per Section 10 and Section 11 of the IGST Act, 2017.

Therefore, the opinion of AAR is that the place from where the applicant makes a taxable Supply of Goods shall be his location, in this case, the Mumbai Head Office/Registered Office at Mumbai and even if the applicant has godowns in different states.

The applicant can clear the goods on the basis of invoices issued by the Mumbai Head Office/Registered Office at Mumbai on payment of IGST in the State of Maharashtra and therefore they need not take separate registration in other states. This would answer their question mentioned above.
Order by AAR

So, as per the complete analysis, applicant i.e. the company is not required to have separate GST registration in each state and only single registration in the state of Maharashtra will work.

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