The Goods and Service Tax (GST) is an indirect tax placed on the supply of goods and services based on their destination. Many indirect taxes, such as VAT, service tax, CST, excise duty, and so on, have been replaced by it. The CGST Act, which took effect on July 1, 2017, was introduced by the government to establish GST as a complete indirect tax.
According to Section 25 (1) of the CGST Act, an individual or business organization must register for GST in each state/union territory where he is required to register. GST registration is the process of registering under this legislation, and it can be completed quickly and conveniently on the GST site online.
The Importance of Having a PAN Card
A PAN card is required under the Income Tax Act of 1961 for all individuals, corporations, partnerships, non-profits, and other entities. The IT department uses the PAN card to keep track of all financial transactions that take place in the country.
Obtaining a PAN card online assists a corporation in receiving multiple remittances and invoices and complete IT returns. If you don’t have a PAN card, you won’t be able to take advantage of the government’s tax breaks and schemes, and you’ll have to pay taxes at the maximum rate possible. If you don’t already have one, you should apply for a PAN card online right away.
PAN Card and GST Registration
The GST regime was implemented under the slogan “One Nation, One Tax.” It aimed to combine direct and indirect taxes into a single bill. GST is by definition an indirect tax, and it is related to the PAN, which is based on direct taxes.
If a person’s business is limited to a single state or UT, he or she usually only needs one GST registration. However, if he does business in two or more states/UTs, he must register for GST in each of those states/UTs. For instance, if somebody is in the trading sector and does business in both Delhi and Mumbai, he will need to register for GST in both states.
Two different GST numbers will be assigned to the same person in two different states in our earlier scenario. Both, however, will be connected to the same PAN card that he owns. This demonstrates that a single PAN card can be used for two GST registrations. In this instance, numerous GST registrations are required. GST numbers can now be linked to PAN cards via the internet.
Whether two GST registrations can be performed with a single PAN card is also a question of personal discretion. When a person maintains many business verticals in the same state or UT, this happens. In this case, he can choose to have separate GST registrations for each of these verticals, provided he meets the requirements set forth in Section 25 (2) of the CGST Act.
What Exactly Is a Business Vertical?
In section 2 (18) of the CGST Act, 2017, the phrase “business vertical” is defined in detail. It refers to a distinguishing component of a business entity that is engaged in the provision of an individual or related services/goods. Furthermore, the component is exposed to potential returns and risks that are distinct from those experienced by other company verticals.
The following are some of the elements that determine if the services or items are related:
- The nature of the manufacturing processes
- The nature of the services or products
- The type of clients who use the services or buy the items.
- The means used to provide services or distribute goods
- Regulatory environment — for example, in the insurance, banking, or public utilities industries.
Important Factors to Consider When Applying for Multiple GST Registrations
- The above-mentioned vertical business criteria should be met by your company.
Furthermore, you cannot use the composition scheme to pay tax on a particular business vertical if one or more of your other business verticals is no longer eligible. - On the supply of services, you must either provide tax invoices or pay tax (as per the CGST Act). Alternatively, you can exchange commodities between your registered business verticals.
What can we do to assist you?
PickMyCompany will relieve you of the burden of GST registration and GST return filing. You’ll never have to worry about the complexities and nuances of GST registration again, and you’ll never have to remember the GST due date. With the help of experienced GST specialists like ourselves, the complexity of GST can be leveraged. Make a wise decision and add PickMyCompany to your team right away!