Separate Business Verticals

[Archna Gupta]

Dear Experts

Please clarify:

1. If a registered person is supplying Business services and Renting services in Delhi, will it be covered under separate business verticals.

2. Is separate GST registration compulsory for separate business verticals?

[Rajagopalan Ranganathan]

Madam,

According to Sub-section (2) of Section 25 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.

According to rule 11 (1) of CGST Rules, 2017 " Any person having multiple business verticals within a State or a Union territory, requiring a separate registration for any of its business verticals under sub-section (2) of section 25 shall be granted separate registration in respect of each of the verticals subject to the following conditions, namely:-

(a) such person has more than one business vertical as defined in clause (18) of section 2;

(b) the business vertical of a taxable person shall not be granted registration to pay tax under section 10 if any one of the other business verticals of the same person is paying tax under section 9;

(c) all separately registered business verticals of such person shall pay tax under the Act on supply of goods or services or both made to another registered business vertical of such person and issue a tax invoice for such supply.

Explanation.- For the purposes of clause (b), it is hereby clarified that where any business vertical of a registered person that has been granted a separate registration becomes ineligible to pay tax under section 10, all other business verticals of the said person shall become ineligible to pay tax under the said section.

Subject to the above provisions you can have separate registration for multiple business verticals owned by you.

[Archna Gupta]

Can you please give some examples of multiple business verticals. Do my services fall under this definition and is it compulsory or optional to get separate registration for multiple business verticals?

[KASTURI SETHI]

Your services are covered under business verticals. Separate registration is required for each business.

[Ravikumar muthusamy]

is it compulsory to take seperate registration for different business verticals?

[KASTURI SETHI]

Yes. In my view it is compulsory.

AI Summary

Separate business vertical registration may be granted subject to conditions, affecting composition eligibility and inter-vertical invoicing. A person is generally granted a single GST registration in a State or Union territory, but may be granted separate registration for multiple business verticals where more than one business vertical exists. Conditions include that separately registered verticals cannot be on the composition scheme if any other vertical pays tax under the regular regime, inter-vertical supplies between registered verticals must be taxable and invoiced, and if one vertical becomes ineligible for composition, all become ineligible.