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

Multiple GST registrations treated as distinct persons - supplies between establishments permitted; turnover aggregated for registration threshold. Where a person obtains more than one registration for distinct establishments, each registration is treated as a distinct person; separate GSTINs are allowed only if places of business differ. Supplies between such registrations are taxable and the PAN-level aggregate turnover-including supplies between the GST registrations-must be used to determine registration thresholds. Co-location at the same premises generally precludes separate registration, and duty evasion must be avoided.