GST Registration

All about GST Registration for Branches & Business Verticals

As per the GST Act, the business entities operating in two different states must obtain separate GST numbers. The article talks about the provisions related to GST registration for branches & business verticals.

All the businesses whose turnover exceeds Rs 40 lakhs in a financial year must obtain GST numbers by registering themselves as normal taxpayers. However, if you have a business in Northeastern states, Jammu & Kashmir, Himachal Pradesh, and Uttarakhand, the threshold limit is Rs. 10 lakhs. For the services providers, the turnover limit is Rs. 20 lakhs and Rs. 10 lakhs for special category states.

What is a business branch and a business vertical, and why does it require separate GST registration for branches under this Act?

Under this Act, there is no explicit meaning of the term business branch. However, in general terms, it can be defined as a branch office in some other location other than the main office, where the same business is conducted.

Business Vertical is defined under Section 18 of the Central Goods and Services Tax Act, 2017^[1]. The section states that a different part of the company that is engaged in the supply of individual goods or services or a group of related goods & services, subject to certain risks & returns different from that of business verticals.

What are the documents required for GST registration for branches?

The documents required for GST registration are:

• DSC (Digital Signature Certificate)
• Copy of ID & address proof of the promoters & directors with a photograph.
• Address proof copy of the place of business.
• PAN copy of the applicant
• Aadhar card copy of the applicant
• Business registration certificate copy
• Copy of bank account statement or canceled cheque.

GST registration for Branches in different states

The taxpayers must obtain GST registration under the GST in each State or Union Territory to supply goods and services.

For example, there is a chain of restaurant, and it is operational in Delhi, Maharashtra, and Chandigarh, then separate GSTIN number must be obtained for all the states.

GSTIN format

Let us now understand the GSTIN format.

Let’s take an example: 27MHCQ04111A2Z5

As shown in the picture above, the GSTIN number is given.

Let us now split the code:

• 27 signify the state code.
• MHCQ04111A signifies the PAN number of the taxpayer.
• 2 is the total registrations within the state.
• Z is a default alphabet.
• 5 is the error check code.

It is important to have separate GST registration operating in different states because the first 2 digits of the GSTIN number would change.

If more than one GST registration within a state, the entity code will change; the rest remains the same.

GST registration for Branches or vertical business within a state

Separate GST registration for business verticals or branches within the same state can be made via Form GST REG – 01. This FORM is applied by all the businesses seeking GST registration for branches or business verticals.

The business has to satisfy the following conditions to get GST registration for business verticals and branches:

• To have more than one business vertical;
• The business not to be registered under the Composition GST scheme;
• All the separate businesses will have to pay tax on the supply of goods & services to another registered business vertical of the same business; to issue a tax invoice for the supply.

Obtaining GST registration for Branches

Separate GST registration for business verticals or branches within the same state can be made via Form GST REG – 01. This FORM is applied by all the businesses seeking GST registration for business verticals or branches.

The application for GST registration is submitted, it was sent to the officer for verification & it takes about 7 days to finish the process & GST certificate generation.

The GST certificate must show the principal place of the additional place.

Conclusion

According to the CGST Act, all suppliers must obtain GST registration to supply goods and services. It is concluded in the article that separate GST registration for business verticals or branches within the state or different states is necessary to maintain transparency.

Therefore, it is rightly said that if one is planning to expand the business, he needs to understand the need to be compliant with various Acts.

Read our article:GST Registration for Sole Proprietorship: Here’s all you need to know