Allocation of One Leased Premise to Two GST Regd. Person

[NISHANT SHAH]

Dear All Experts,

I want to know that whether one premises can be given on lease to two GST Registered person as per GST Act and if so how it can be allotted to them? This premises will be used for solely for storage/warehouse of material/goods only and for movement of goods for sale of goods and not for the purpose of manufacturing of goods.

If this premise can be given on sub-lease to two GST Registered persons, below questions arise from GST point of view.

1)Can both person show same premises as additional place of supply in their GST Registration?

2) How to allocate this premises to both lessee ?

3)How to bifurcate expenses like Water, Electricity etc. between lessee?

4) Any other legal requirement to comply with?

[DR.MARIAPPAN GOVINDARAJAN]

Two or more registrations can be obtained if the said premises shared by the two or more businesses.

Regarding other queries you may approach professionals.

[KASTURI SETHI]

After in agreement with Dr.Givindarajan, Sir, I express my views query-wise as under as under :-

(1) Yes but with demarcation.

(2) By way of agreements/rent deed/lease deed. Separate offices/godowns in the same premises.

(3) By way of installation of sub-meters for water and electricity via agreements.

(4) Go through the following case law:- (This will solve your queries in this context)

2019 (28) G.S.T.L. 338 (A.A.R. - GST) = 2019 (8) TMI 817 - AUTHORITY FOR ADVANCE RULING - KERALA IN RE : SPACELANCE OFFICE SOLUTIONS PVT. LTD.

[NISHANT SHAH]

Thanks sir for such elaborative answer.

[Ganeshan Kalyani]

I agree with views of Sri Mariappan Sir & Sri Kasturi Sir. Both are having sea of knowledge. The best part I acknowledge of them is that they always attempt to give comprehensive reply. Thanks.

AI Summary

Leased premises allocation: demarcated shared occupancy permits separate GST registrations with contractual allocation and cost apportionment. A single premises may be leased or sub leased to two GST registered persons if occupation is demarcated and documented; separate registrations are permissible for distinct demarcated areas. Allocation should be by lease/sub lease/rent agreements specifying portions and usage. Utilities and shared expenses may be apportioned by contract or sub metering. Documentary evidence of demarcation and reference to relevant advance rulings should be maintained for GST compliance.