MULTIPLE REGISTRATIONS ON SAME ADDRESS UNDER GST LAW

[Mr. M. GOVINDARAJAN]

The GST law requires a person who is supplying goods or rendering services, to register under the provisions of the GST laws and the rules made there under.  Section 22 of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds the threshold limit as fixed from time to time.  Section 23 gives a list of persons who are not liable to be registered under this Act.  Section 24 provides a list of suppliers who are compulsorily required to be registered under this Act irrespective of the aggregate turnover in a financial year.

Section 25 read with the provisions of CGST Rules, provides the procedure for registration.  The supplier shall apply in Form GST REG – 1.  Sl. No. 16 of the Form requires giving the details of the address of the principal place of business.  The following documents are to be submitted for the proof of principal place of business-

• For Own premises-

• Any document in support of the ownership of the premises like latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill.

• For Rented or Leased premises-

• A copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill.

• For premises not covered above-

• A copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy. For shared properties also, the same documents may be uploaded.

• For rented/leased premises-

• Where the Rent/lease agreement is not available, an affidavit to that effect along with any document in support of the possession of the premises like copy of Electricity Bill.

• If the principal place of business is located in a Special Economic Zone or the applicant is a Special Economic Zone developer, necessary documents/certificates issued by Government of India are required to be uploaded.

The issue to be discussed in this article is whether multiple registrations may be obtained in one address.  There is no expression provision for multiple registrations either in the Act or in the rules made there under.

In re ‘Spacelance office solutions Private Limited’ – 2019 (8) TMI 817 - AUTHORITY FOR ADVANCE RULING - KERALA, the applicant is engaged in the business of sub leasing of office spaces to their clients as ‘co-working spaces’.  The landlord permitted the applicant for sub leasing  and also for registrations of such clients to registered under GST laws.  The applicant provided to their customers sharing the office premises dedicated land line number, fax number, high speed internet, air-conditioners, housekeeping, pantry with drinking water, power back up, receptionist support, letter and postage handling and meeting room.  The petitioner also provides dedicated and distinct and identifiable space, tables and chairs to each client working there.  These companies are maintaining their financial records in electronic form and very well accessible from the co-working space at all time.

The applicant sought for an advance ruling from the Authority for advance Ruling- Can GST registrations allowed for multiple companies from same address, provided they follow all GST rules related to ‘principal place of business? These companies are startup companies in service sector, where no stock has to be maintained.

The applicant submitted hat leasing and maintaining full-fledged independent offices in big cities are unaffordable and unfeasible to most of the start-up companies due to the high rental and related charges for amenities.  For this reason many startups prefer co-working solution.  This scheme reduces the cost of establishment and administration.  Now it is common for the startup companies to share the common premises for their businesses.  But they found difficult in getting registration because they are located in the same premises.  If registration is filed it is rejected by the Authorities for the reason that already another company is registered in the said address.  These companies are having the same address, same electricity bill except suit number or desk number.  The registered companies may display their registration certificates in the shared space.  These companies are service providers and they are maintaining the books of accounts in physical or electronic forms.  They are entitled to get separate GST registration from the same address.

The Authority for Advance Ruling considered the submissions of the applicant.  The Authority found that in this changing world with a faster mode of communication every day, the traditional office culture is being overshadowed by the shared office space culture.  These co-working spaces have thrived significantly as it is the only option for the startup companies to open their offices with the lesser cost.  Co-working is a business service provision model that involves individuals working independently or collaboratively in shared office space.  Co-working space is basically a type of workplace where they share the same work environment, thus making a community in the same area. 

The Authority further found that a virtual office is an access to the basic services that are generally provided in a traditional office, such as permanent office address, meeting rooms or video conferencing rooms, a mail forwarding facility with a minimum charge, etc., without a room for real life people.  These officers are of greater benefits to the travelling freelancers, small businesses, startups and even to the businesses that are operated from remote areas.

The Authority held that there is no prohibition in the GST Act for obtaining registration in a shared office space or virtual office, if the landlord permits such sub leasing as per the agreement.  Each co-working space is demarcated with different suit number or desk number.  The registration is given based on PAN, identification of tax payer.  While applying for registration by such companies the rental agreement with the landlord and the lessee along with the agreement made between the lessee and sub-lessee must be uploaded as proof of address of principal place of business of respective suit or desk number.  In addition to the above the electricity monthly utility bill, water charges or other common services availed by the respective suit or desk number.  If this is, there may not be any hindrance to apply for registration under GST Act by these companies having offices in the same premises.  Further the GST number assigned to these companies must be displayed at a prominent location and books of accounts relating to the activities or business are to be kept in the principal place of business.