Registration requirement in a State where goods are stored

[Krishna Murthy]

Sir, Mr Seller registered person in state A, purchases goods in state B. However, he does not want to bring the goods to state A and wants to place the same in godown at state B. At later point of time, he sells the goods stored in godown at state B to a person located at state C and raises an IGST invoice with GST Number of state A. He does this to reduce the transportation cost. Is Mr Seller liable to get registered in state B.

In this matter, there is an advance ruling of Maharastra AAR in the case of M/s GANDHAR OIL REFINERY (INIDA) LIMITED reported in 2019 (6) TMI 1010 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, which states that he is not required to get registered in a state where goods are stored and can make supply from the location where he is registered raising IGST or CGST/SGST invoice depending on his buyer. However, the said advance ruling is in relation to imports. Can the same analogy be applied to goods procured locally inside India.

Are there any procedural requirements of declaring godown where stock is placed at state B so that authorities may be question later for non declaring godown. Please clarify.

[KASTURI SETHI]

Sh.Krishna Murthy Ji,

Query-wise my view is as under :

1. Yes. Separate registration is required in B State. (See Section 25 of CGST Act)

2. No. Analogy is not applicable.

[Ganeshan Kalyani]

Sir, I agree with Sri Kasturi Sir.
Suppose if based on order from State C if you buy from B and ask B to deliver the goods to C then in my view no need to register in B. But here, since you store the goods till the time you get an order it becomes necessary to get your self registered to do supply from B.

[Shilpi Jain]

If in state B he is having a place which is a fixed establishment that is permanence of structure and person then registration in state B is inevitable. the godown looks like a fixed establishment so registration would be required

AI Summary

Registration requirement: storing goods in another state generally requires local GST registration and cannot rely on import rulings. A supplier registered in State A who stores goods in a godown in State B must obtain separate registration in State B because storage there constitutes a fixed establishment, and an advance ruling on imports does not apply to local procurements. If goods are merely ordered from State B and delivered directly to State C without the supplier storing them in State B, local registration may not be required. The replies emphasise securing local registration where a permanent place of storage exists rather than relying on import rulings.