SEPARATE REGISTRATION FOR MULTIPLE PLACES OF BUSINESS WITHIN A STATE OR UNION TERRITORY
The Goods and Services Tax
Act, 2017 came into force with effect from 1.7.2017 in India.
Under Goods and Services Tax
Act, 2017, GSTIN has been granted to taxpayers as “business verticals” who were
having more than one place of business such as branches, factories, warehouse
etc.
In such cases, the taxpayers will
have to file single consolidated GST return from the main place of business registered
i.e. from Head Office for all branches supplying goods or services or both.
For that purpose, the details
were to be collected from their branches and the supply details were to be
furnished from the Head Office. The
taxpayer has to consolidate the turnover of all branches and hence the number
of invoices increases and in the GST Portal, there are certain difficulties if
the total number of invoices exceeds 500 for uploading.
If there are any mistakes in
details received from the branches, the taxpayer in head office will have to
rectify the details and then only file returns and if there is any delay the
taxpayer has to pay interest for belated submission of return.
Similarly reconciliation of
the transfers from Head office to Branch or Branch to Head office and transfers
from one branch to another branch were difficult (with or without e-Way Bill). Job work details outward and inward and
credit note details and debit note details were also to be included in the GST
Returns and the same is very difficult to consolidate.
The Central Government has now
issued notification for separate registration for multiple places of business
within a state or within a union territory.
In FORM GST REG-01, the words
“places of business” were substituted instead of the words “business verticals”
The relevant rules were
substituted / amended as shown below:
“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, namely:-
a) such person has more than one place of business as defined in clause (85) of section 2;
b) such person shall not pay tax under section 10 for any of his places of
business if he is
paying tax under section 9 for any other place of business;
c) 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.
Explanation. - For the purposes of clause (b), it is hereby clarified that where any
place of business of a registered person that has been granted a separate registration
becomes ineligible to pay tax
under section 10, all other registered places of business
of the said person shall become ineligible to pay tax under the said section.
(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”.
The Central Government has
also allowed transfer of credit on obtaining separate registration for multiple
places of business within a State or Union Territory as shown below and hence
there is no necessity to forego the Input Tax Credit in such cases.
In the said rules, after rule 41,
the
following rule shall be inserted, namely:-
“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.
Explanation.- For the purposes of this
sub-rule, 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.”.
In the said rules, in Rule 96A ,–
(a) in the marginal heading, for the words “Refund of integrated tax paid on export”,
the
word “Export” shall be substituted;
(b) in sub-rule (1), in clause (b), after the words “convertible foreign exchange”, the words “or in Indian rupees, wherever permitted by the Reserve Bank of India” shall
be inserted.
In the said rules,
in FORM GST REG-01, in instruction 12,
for the words “business
verticals” at both the places where they occur, the words “places of
business” shall be substituted.
The changes came into force with effect from
1.2.2019.
The relevant notification is given below for
ready reference.
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section
(i)]
Government of India Ministry of Finance
(Department of Revenue)
[Central Board of Indirect Taxes
and
Customs]
Notification No. 03/2019 – Central Tax
New Delhi,
the 29th January, 2019
G.S.R……(E). - In exercise of the powers
conferred by section 164 of the Central Goods and
Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules
further to amend the Central Goods
and
Services
Tax Rules, 2017, namely:-
1. (1) These rules may be called the Central Goods and Services Tax (Amendment) Rules,
2019.
(2) Save as otherwise provided in these rules, they shall come into force on the first day of
February, 2019.
In the said rules, for rule 11, the following rule shall be substituted, namely:-
“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, namely:-
(a) such person has more than one place of business as defined in clause (85)
of section 2;
(b) such person shall not pay tax under section 10 for any of his places of
business
if he is paying tax under section 9 for any other place of business;
(c) 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.
Explanation. - For the purposes of clause (b), it is hereby clarified that where any
place of business of a registered person that has been granted a separate registration
becomes ineligible to pay tax under section 10, all other registered places of business of the said person shall become ineligible to pay tax under the said section.
(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”.
In the said rules, after rule 41,
the
following rule shall be inserted, namely:-
“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. Explanation.- For the purposes of this
sub-rule, 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.”.
In the said rules, in rule 96A ,–
(a) in the marginal heading, for the words “Refund of integrated tax paid on export”,
the
word “Export” shall be substituted;
(b) in sub-rule (1), in clause (b), after the words
“convertible foreign exchange”, the words “or in Indian rupees, wherever permitted by the Reserve Bank of India” shall
be inserted.
19. In the said rules, in FORM GST REG-01, in instruction 12,
for the words “business
verticals” at both the places where they occur, the words “places of
business” shall be substituted.
[F.No.20/06/16/2018-GST (Pt. II)]
(Gunjan Kumar Verma) Under Secretary to the Government of India
Note:- The principal rules were published in the Gazette of India, Extraordinary, Part
II,
Section 3,
Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June,2017, published vide number G.S.R 610 (E), dated the 19th June, 2017 and last amended vide notification
No. 74/2018 - Central
Tax, dated the
31st December, 2018,
published
vide number G.S.R 1251 (E), dated the 31st December, 2018.