Requirement for obtaining GST registration for Business Facilitator

[Shailesh Chechani]

Dear Sir/Madam,

I have a query regarding the requirement for obtaining the GST registration for a Business Facilitator (BF) or Business correspondent (BC) providing services to the banking company.

Facts of the case-

ABC shared service limited (hereinafter referred as "ABCSSL") is providing support services to ABC Bank limited (hereinafter referred as "ABC Bank", "Bank") & wholly owned subsidiary of the Bank. The services includes field work visits, Lead generation, loan application processing, SHG nurturing, NPA recovery etc. The ABCSSL has GST registration in only 4 states & operates centrally to provide services to ABC Bank. However, the bank has GST registration PAN India & employees of ABCSSL visits each state for providing services. During field visit, it is understood that the ABCSSL employees access the ABC Bank branches for collection and submission of documents in relation to different products. However, there is no permanent establishment of ABCSSL in such states. ABC Bank do not charge any lease/rental charges/GST to ABCSSL for access or usage of any such premises. 

Query-

1. Whether ABCSSL is required to take GST registration in all such states where their employees go on field visit and provide services to ABC Bank and its branches ?

2. If there is no requirement to obtain GST registration in all such states than how invoicing will be done for such transaction as the taxpayer have to take care of section 2(71) of CGST Act, 2017 that defines about "location of the supplier of  services"  before issuing invoice.

3. For services provided by BF the RCM liability is arise on the Banking company & hence liability will be paid by ABC Bank only than there is no requirement of obtaining the GST registration for ABCSSL as they are involved in providing BF & BC services only. Please correct me if my understanding is wrong.

Your response to the above queries would be appreciated. Thanks.

AI Summary

GST registration obligation for inter-state BF/BC supplies persists despite temporary presence of personnel under RCM.
Registration under Section 24(i) is required for persons making inter state taxable supplies, but the supplier's location for invoicing is the place of a fixed establishment with permanence; temporary presence of employees at bank branches without infrastructure does not create such establishment, so invoices may be issued from the principal place of business. The reverse charge mechanism renders the recipient liable for tax but does not by itself negate the supplier's registration obligation; where services are solely under RCM and no fixed establishment exists in other states, additional registrations are not warranted.