Two firms on one PAN

[Rajesh Kumar]

Dear experts,

I want to know that is there any implications if an individual opens two firms on his PAN ?

If yes, can he make sale and purchase between both firms ?

Is there duty evasion possibility?

[Amit Agrawal]

Sub-section (4) & 5 of Section 25 are relevant in the context of the query raised:

"(4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.

(5) Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act."

W.r.t. third question about 'duty evasion possibility', I am of the view that one should NEVER indulge in duty-evasion or even, looking into possibility of duty-evasion.

[Shilpi Jain]

Opening 2 firms in one PAN - pls note that you would not be able to take GST registration if oth these firms are operating from the same premises.

If operating from different premises registration can be taken and supplies between them will be liable

Also, for considering the turnover for checking registration requirement, the turnover of the PAN (INCLUDING THE SUPPLIES BETWEEN THE 2 GSTINS) is to be checked rather than the individual GSTIN.

[Shilpi Jain]

So I am not sure of what kind of tax evasion are you referring to

[Ganeshan Kalyani]

Sec 25 of CGST Act permits to obtain more than one GSTIN under one PAN provided the place of business is different.

[Padmanathan KV]

Request the querist to elaborate the query further.

What do you mean by "opens two firm" on his PAN? are you referring to taking two GST registration?

Also what is the actual intention of the same and making purchase and sales between them?

AI Summary

Opening Two Firms Under One PAN: GST Registration Rules and Duty Evasion Risks Explained (Section 25 GST Act) An individual inquired about the implications of opening two firms under one PAN, specifically regarding GST registration and the possibility of duty evasion. Experts responded by referencing Section 25 of the GST Act, which treats multiple registrations as distinct entities if they operate from different premises. It was emphasized that GST registration is not possible if both firms operate from the same location. Additionally, any transactions between the firms must be included in the total turnover for registration requirements. Experts advised against any attempts at duty evasion and requested further clarification on the query's intent.