TRANSFER OF GST CREDIT | BETWEEN DIFFERENT REGISTRATIONS | WITHIN STATE | WITH SAME PAN |

This article has the follow Content

1. Lets know the Scenario of Business Verticals Which was majorly amended After 1st Feb 2019 Where Section 25(2) of CGST Act 2017 was amended

2. Position After Amendment

3. Position before Amendment

4. Amendment Effect

5. What is place of business which is used now?

6. But Wait a minute?

• How to split credits?

• Within how much time you've to split credit ?

1. Lets know the Scenario After 1st Feb 2019 Where Section 25(2) of CGST Act 2017 was amended

As we all know that Now if a person has multiple places of businesses with in a state can get separate GST Number for each place of business , but what if one existing business is splitted into two or more GST Numbers within a same state?

2. Position After Amendment

Section 25(2) of CGST Act 2017 is stated as under,

1.A person seeking registration under this Act shall be granted a single registration in a State or Union territory:

Provided that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.

3. Position before Amendment

Section 25(2) of CGST Act 2017 is stated as under,

1. A person seeking registration under this Act shall be granted a single registration in a State or Union territory:

Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.

4. Amendment Effect

The word business verticals has been changed with Place of Business.

That means the concept of Business verticals has been removed from GST What is business Verticals? Let me give you a brief example.

1. Business 1 – IT Software Services

2. Business 2 – Employee Training Services

Taxpayers can now opt for separate registrations in a State based on location for each of the business (though they are in similar line of business)

5. What is place of business which is used now?

As per the CGST Act 2017 Place of business is defined as under.
(85) “place of business” includes–– 
(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or 
(b) a place where a taxable person maintains his books of account; or 
(c) a place where a taxable person is engaged in business through an agent, by whatever name called;

Hence it is clear that if a person has two place of business , he can obtain two registrations at his option to ease the accounting and other aspects and maintain more ease of compliance and analytics.

(6) But Wait a minute?

(A) How to split credits? Rule 41A has been inserted vide Notification no. 03/2019-CT dt. 29.01.2019 wef 01.02.2019 which states that the value of credit is to be split on the basis of entire value of assets held at the time of registration.

For this purpose, the registered unit needs to submit Form GST ITC-02A on the common portal. Such Form ITC-02A is to be accepted by the newly registered person on the common portal. Upon such acceptance, the input tax credit is transferred to these newly registered persons.

That means you have to split assets for the both places of business.

(B) Within how much time you've to split credit ? The form GST ITC-02A has to be filed within 30 days of from obtaining such separate registrations.

Explanation.- For the purposes of this sub-rule, it is hereby clarified that the ‗value of assets‘ means the value of the entire assets of the business whether or not input tax credit has been availed thereon.