Wondering about whether or not multiple GST registrations can be made with a single PAN card? You’ve stumbled upon just the right read. In this blog, we will be discussing instances where the same PAN card can be used to obtain two distinct GST registrations.
The Goods and Service Tax (GST) is a destination-based indirect tax levied on the supply of goods and services. It has replaced many indirect taxes such as VAT, service tax, CST, excise duty, and so on. To establish GST as a comprehensive indirect tax, the government introduced the CGST Act with effect from 1st July 2017. Section 25 (1) of the CGST Act mentions that an individual/business entity should apply for GST registration in every State/Union Territory, where he is liable to register. This process of registration under this act is known as GST registration and it can be done easily on the GST portal online. lets have a look at having two GST registrations.
Importance of PAN Card
As mandated in the Income Tax Act of 1961, a PAN card is a must for all individuals, companies, partnerships, non-profits etc. The IT department uses the PAN card to track all financial transactions which take place in the country.
Getting a PAN card online helps a company receive several remittances and invoices and is also beneficial while filing IT returns. If you are without a PAN card, you cannot enjoy the tax benefits and schemes offered by the government and you will be liable to pay taxes at the highest rate applicable. If you don’t have one yet, it’s high time you apply for a PAN card online.
GST Registrations and PAN Card
The GST regime came into force with the motto “One Nation, One Tax”. It wanted to bring both direct and indirect taxes under one umbrella. GST is an indirect tax by nature and it is linked to PAN which is based on direct taxes.
Normally, a person obtains only one GST registration in a state or UT if his business is restricted to only that state/UT. But, if he operates in two or more states/UTs, he is liable for GST registration in each of those states/UTs. For example, if he is dealing in the trading business and he trades in both Delhi and Mumbai, he will need to apply for GST registration in both these states.
For the same person in our previous example, two distinct GST numbers will be allotted, in two different states. But, both will be linked to the same PAN card belonging to him. This shows that 2 GST registrations are possible on one PAN card. This is the case where multiple GST registration is necessary. Nowadays, GST numbers can be linked to PAN cards online.
It’s also a matter of personal preference whether two GST registrations can be completed with a single PAN card. This occurs when a person operates many business verticals in the same state or UT. In such a scenario, he can opt to have separate GST registrations for each of these verticals, subject to fulfilling conditions mentioned in Sec 25 (2) of the CGST Act.
Conditions for Acquiring 2 GST Registration on One PAN Card
Conditions for acquiring two GST registrations under one PAN card are governed by specific rules outlined in the CGST Act. Rule 11 mandates that to secure a new registration for a business vertical within the same state, the applicant must meet certain criteria. Firstly, the applicant should operate multiple business verticals according to Section 2(18) of the CGST Act. Secondly, if any business vertical of the applicant is registered under the normal scheme, they cannot opt for the composition scheme. Additionally, dealing in interstate supplies is a prerequisite for obtaining separate registrations.
Furthermore, Section 9 stipulates that distinct registrations for various verticals necessitate separate tax payments. Even supplies between different verticals of the same business are considered taxable, requiring the issuance of invoices. For businesses registered in special economic zones (SEZ) or SEZ developers, Rule 8(1) mandates a separate application for GST registration outside the SEZ.
An amendment to Rule 11(1) allows businesses with multiple locations in a state or union territory to apply for separate registrations under the same PAN, even if the business vertical remains the same. This change simplifies the process, eliminating the previous requirement for distinct business verticals. Additionally, governments have the authority to grant tax exemptions based on public interest through notifications and council recommendations.
What Is the Business Vertical?
The term ‘Business Vertical” is described in detail in section 2 (18) of the CGST Act, 2017. It means a uniquely distinguishable component of a business enterprise that is occupied in the supply of individual services/goods or related services/goods. Also, the component is subject to possible returns and risks that are completely different from other verticals of the business.
Here, the factors that determine whether the services or goods are related includes:
- The nature of the processes of production
- The type of services or goods
- The class or type of customers availing the services or goods
- The methods of supply of services or distribution of goods
- The nature of the regulatory or statutory environment – including insurance, banking or public utilities.
Important Points Regarding Multiple GST Registrations
When considering multiple GST registrations, several important points should be taken into account to ensure compliance with the relevant regulations. Firstly, your business must meet the specified criteria outlined earlier to be eligible for multiple registrations. It’s crucial to note that if one of your business verticals is not adhering to GST provisions, you are restricted from applying for the composition scheme under GST for that specific vertical.
Moreover, the company is obligated to adhere to GST compliances, particularly regarding the issuance of tax invoices and filing for the supply of goods and services within its various business verticals. This entails a meticulous approach to tax documentation and reporting to meet the compliance standards set forth by the GST regulations. By carefully considering these important points, businesses can navigate the process of multiple GST registrations while ensuring adherence to the necessary requirements and regulations.
Benefits of Two GST Registrations With the Same PAN
Having two GST registrations with the same PAN in the same state offers several advantages:
- Separate Accounting: It allows you to maintain distinct books of accounts for different business verticals, branch offices, or warehouses. This separation provides better clarity and transparency in financial management.
- Independent Tax Liability: Each GST registration enables you to calculate tax liabilities separately for each unit or business segment. This helps in managing and monitoring taxes more effectively.
- Distinct Input Tax Credit: You can claim input tax credits independently for each business vertical or location. This separation ensures more accurate and efficient utilisation of credits and reduces the risk of errors.
Disadvantages of Two GST Registrations
Opting for two GST registrations under the same PAN can lead to some challenges:
- Increased Compliance Burden: Each registration requires adherence to specific compliance procedures, adding complexity to your administrative tasks. This means more effort to ensure that each branch or business vertical meets regulatory requirements.
- Higher Costs: Managing separate books of accounts, hiring additional staff, and handling administrative expenses can become costly. The need to support multiple registrations often results in increased overheads.
- Complex Transaction Monitoring: Tracking and reconciling transactions across different business units can be complicated. Ensuring accuracy in financial records and tax calculations for each registration requires meticulous effort and can be challenging.
Registration Process for Two GST Registrations
To obtain two GST registrations under the same PAN, follow these steps:
- Visit the GST Portal: Start by going to the official GST portal.
- Select ‘New Registration’: Choose the option for a new registration on the portal.
- Complete First Registration: Enter the required details for the first registration. Submit the application and wait for approval.
- Apply for Second Registration: Once the first registration is approved, apply for the second registration. Use the same PAN but provide details for a different business vertical, branch office, or warehouse.
- Submit the Second Application: Complete and submit the application for the second registration.
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FAQs
Is 2 GST registration possible on one PAN card?
Yes, it is possible to have two or more GST registrations under the same PAN card, provided certain conditions and criteria, such as distinct business verticals, are met.
How many GST registration can one person have?
There is no specific limit on the number of GST registrations a person can have, as long as each registration corresponds to a distinct business vertical.
Can two companies have the same PAN?
No, each company must have a unique PAN. The PAN serves as a unique identifier for taxation purposes and cannot be duplicated across different entities.
Can an individual PAN card be used for GST registration?
Yes, an individual PAN card can be used for GST registration, particularly if the individual is engaged in business activities and requires a GSTIN.
Is PAN and GST linked?
Yes, PAN and GST are linked, and PAN is a mandatory requirement for obtaining GST registration. The linkage ensures seamless integration of tax-related information across different platforms.
Can I use an individual PAN card for business?
Yes, individuals conducting business activities can use their individual PAN card for business-related transactions and GST registration.
Is it OK to have 2 PAN cards?
No, it is not permissible to have two PAN cards. Each individual or entity is allowed only one PAN card, and possessing multiple PAN cards is considered a violation of tax regulations.
What is the difference between personal PAN and business PAN?
The personal PAN is meant for individuals, serving as a unique identifier for personal taxation, while a business PAN is used for entities or businesses, facilitating tax-related processes specific to business activities.
