Can One Pan Card be used for Two GST Registration?

Last Updated On: July 5, 2021, 9:33 p.m.
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CAN ONE PAN CARD BE USED FOR TWO GST REGISTRATION

The Goods and Service Tax (GST) is a destination-based indirect tax levied on the supply of goods and services. It has replaced many indirect taxes such as VAT, service tax, CST, excise duty, and so on. To establish GST as a comprehensive indirect tax, the government introduced the CGST Act with effect from 1st July 2017.

Section 25 (1) of the CGST Act mentions that an individual/business entity should apply for GST registration in every State/Union Territory, where he is liable to register. This process of registration under this act is known as GST registration and it can be done easily on the GST portal online. 

 

Importance of PAN Card

As mandated in the Income Tax Act of 1961, a PAN card is a must for all individuals, companies, partnerships, non-profits etc. The IT department uses the PAN card to track all financial transactions which take place in the country. 

 

GST Registration and PAN Card

The GST regime came into force with the motto “One Nation, One Tax”.  It wanted to bring both direct and indirect taxes under one umbrella. GST is an indirect tax by nature and it is linked to PAN which is based on direct taxes.

Normally, a person obtains only one GST registration in a state or UT if his business is restricted to only that state/UT. But, if he operates in two or more states/UTs, he is liable for GST registration in each of those states/UTs. For example, if he is dealing in the trading business and he trades in both Delhi and Mumbai, he will need to apply for GST registration in both these states.

For the same person in our previous example, two distinct GST numbers will be allotted, in two different states. But, both will be linked to the same PAN card belonging to him. This shows that 2 GST registrations are possible on one PAN card. This is the case where multiple GST registration is necessary. Nowadays, GST numbers can be linked to PAN cards online

It’s also a matter of personal preference whether two GST registrations can be completed with a single PAN card. This occurs when a person operates many business verticals in the same state or UT. In such a scenario, he can opt to have separate GST registrations for each of these verticals, subject to fulfilling conditions mentioned in Sec 25 (2) of the CGST Act.

 

Conditions for acquiring 2 GST registration on one PAN card

The taxpayers must be dealing with inter-state supply to avail separate GST registration.

  • A person managing multiple places of business in a given territory shall be granted a separate registration.
  • Any branch of the business is working under the composition scheme is not permitted to avail separate GST registration.

 

What is the business vertical?

As per section 2 (18) of the CGST Act, 2017[1], the term Business Vertical is referred to as a distinguishable component of an enterprise that provides deals with the supply of goods and services. The business component is vulnerable to possible risks that are different from the rest of the business’s verticals.The act further explains the following conditions taken into account for new vertical registration under GST.

 

  • The type of production process
  • The type of services or goods
  • Type of customer-base reaping the services
  • Type of distribution channel
  • Type of regulatory or statutory environment supporting the business verticals

 

Rule 11- CGST Rules, 2017

There are a certain set of regulations that have been set by this law regarding the separate GST registration for business verticals operating in the same State or UT. Rule 11 (1) further add some guidelines w.r.t a new vertical. Those rules are as follows:-

  • A person seeking separate registration should have multiple business verticals (precisely more than one) as per the provision of section 2 (18) of the act.
  • An applicant cannot opt for registration under section 10 if the remaining business vertical of such an applicant already secured this registration.
  • Section 9– The person operating with several business verticals needs to cater to tax liabilities under the act on the supply of goods or services provided to other verticals of business. The provision also stresses on the issuing of invoice in this context.
  • Rule 8(1), CGST Act 2017 – A separate GST registration is mandatory for the taxpayer who wants its business unit to be identified outside the SEZ.

 

Important points regarding multiple GST registrations:

Your business should meet the criteria mentioned above if it wishes for multiple GST registrations

Additionally, if one of the business verticals is not serving the GST provision, you cannot apply for composition scheme under GST for a specific business verticals

The company must comply with the GST compliances on account of issuing the tax invoice or tax filling for the supply of goods and services within the business verticals.

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