As per S. 22 of the CGST Act, 2017 (Act), every Business who is supplying goods/services as per S. 7 of the Act is required to get itself registered. Now, there may arise situation when a business may have separate business units in the same state/UT. The registration for such units is covered u/s 25 of the Act. As per S. 25 of the Act, the person shall be granted a single registered registration in a State/UT. Proviso to S. 25(2) of the Act provides the registration provision in case a business has several units in the same state/UT.
Now, this proviso to S. 25(2) has been amended by the CGST Act, 2018. The amendment is made effective from 01.02.2019.
Before amendment the proviso was as follows:
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.
After the amendment the proviso is as below:
Provided that the 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 conditions as may be prescribed.
The effect of the amendment is that the units which do not fall within the scope of word 'business vertical' can now take multiple registrations in same state/UT.
Accordingly, CGST Rules have been amended via CGST (Amendment) Rules, 2019, coming into force on 01.02.2019.
Rule 11 has been substituted which is as 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”.
New Rule 41A has been inserted which is as below:
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.”