As per Section 25(2) of CGST Act 2017, A person seeking registration under this Act shall be granted a single registration in a State or Union territory:

Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.

Further, as per CGST Amendment Act 2018, the original proviso to Section 25(2) has been substituted with-

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.

Therefore, w.e.f 1st February 2019, taxpayers have an option for obtaining registration for each respective place of business within a particular state or union territory, even though the said multiple business places are not different business verticals.

However, some conditions have been prescribed under Rule 11 of CGST Rules 2017, for obtaining registration for multiple places of business in a state or union territory:

1. There should be uniformity for either opting for composition scheme across all place of businesses, or in none of them. It has also been 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. Supplies made between multiple place of business holding different GSTIN, shall be chargeable to GST and a tax invoice or bill of supply shall also be issued

Transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory

Rule 41A of CGST Rules 2017 specifies the procedure for transfer of input tax credit, wherein a taxpayer has obtained separate registration for multiple place of business within a state or union territory. The steps to be followed are as below-

1. This rule is relevant for a registered person who has obtained separate registration for multiple places of business within a state or union territory 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.

2. The registered person is required to furnish Form ITC-02A within 30 days of obtaining separate registrations. The Form ITC-02A was not available on the portal previously, however the same has been made functional now & therefore taxpayers can now easily transfer their unutilised input tax credit lying in electronic credit ledgers to the newly registered place of business. Earlier, since the form was not functional, the taxpayers followed the practice of transferring stock by way of raising tax invoices to the newly registered persons, creating unnecessary complications.

3. 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.

Note- ‘value of assets‘ means the value of the entire assets of the business whether or not input tax credit has been availed thereon.

4. 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.

Therefore, in case a taxpayer has multiple places of business within a state or union territory, separate registration under GST can be obtained for each place of business. And, the unutilised input tax credit can be transferred to the new registered persons by way of ITC-02A.

Author can be reached at casimrankatyal@gmail.com

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