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TMI BlogBUSINESS VERTICAL IN GSTX X X X Extracts X X X X X X X X Extracts X X X X ..... BUSINESS VERTICAL IN GST X X X X Extracts X X X X X X X X Extracts X X X X ..... ection with commencement or closure of business; (e) provision by a club, association, society or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a licence to book marker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities. Business vertical The term 'verticals' in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness refers to a vertical market. Basically, a vertical market is one where businesses and marketers cater to the needs of a specific group of people within an industry. This concept is in contrast to a horizontal market, where the focus is diverted to a large amount of people regardless of industry. A vertical market is a market in which vendors offer goods and services specific to an industry, trade, profession, or other group of customers with specialized needs. An example could be software that manages services in hotels-amenities solutions. Section 2(18) of the Act defines the expression 'Business vertical' as a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated goods or services which is subject to risks and returns that are different from those of the other business verticals. The explanation to this section provides that the following factors should be considered in determining whether the goods or services are related include- * the nature of the goods or services; * the nature of the production processes; * the type or class of customers for the goods or services; * the methods used to distribute the goods or supply of services; and * the nature of regulatory environment (wherever applicable), including banking, insurance or public utilities. Registration Section 25 provides the procedure for registration. Section 25(2) provides that a person seeking registration under this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act shall be granted a single registration in a State or Union territory. However 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. Rule 11 of Central Goods and Services Tax Rules, 2017 ('Rule' for short) provides for separate registration for multiple business verticals within a State or Union territory. Rule 11 (1) provides that any person having multiple business verticals within a State or a Union territory, requiring a separate registration for any of its business verticals shall be granted separate registration in respect of each the verticals subject to the following conditions- * such person h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as more than one business vertical as defined in section 2(18) of the Act; * the business vertical of a taxable person shall not be granted registration to pay tax under section 10 (composition levy) if any of the other business verticals of the same person is paying tax under section 9; * all separately registered business verticals of such person shall pay under the Act on supply of goods or services or both made to another registered business vertical of such person and issue a tax invoice for such supply. The explanation to this sub-section clarified that where any business vertical of a registered person that has been granted a separate registration becomes ineligible to pay tax under section 10, all other business verticals of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said person shall become ineligible to pay tax under the said section. Units in SEZ The proviso to Rule 8(1) provides that a person having unit(s) in a Special Economic Zone or being a Special Economic Zone Developer shall make a separate application as a business vertical distinct from his other units located outside the Special Economic Zone. Registration procedure * A registered person eligible to obtain separate registration business verticals may submit a separate application in form GST REG - 01 in respect of each such vertical; * The application shall be forwarded to Superintendent of Central Tax; * The Superintendent shall examine the application and the accompanying documents; * If the application is found to be in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, he shall approve the grant of registration to the applicant within a period of three working days from the date of submission of the application; * If the application is found to be defective, either in terms of any information or any document required to be furnishedunder the said Rule or where the Superintendent requires any clarification with regard to any information provided in the application or documents furnished there with, he may issue a notice to the applicant electronically in Form GST REG - 03 within a period of three working days from the date of submission of the application; * The term 'clarification' includes modification or correction of particulars declared in the application for registration, other than Permanent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Account Number, State, mobile number and e-mail address declared in Part A of Form GST REG - 01; * The applicant shall furnish such clarification, information or documents electronically in Form GST REG - 04 within a period of seven working days from the date of receipt of such notice; * If the Superintendent is satisfied with the clarification, information or documents furnished by the applicant, he may approve the grant of registration to the applicant within a period of seven working days from the date of the receipt of such clarification or information or documents; * If no reply is furnished by the applicant in response to the notice issued or where the Superintendent is not satisfied with the clarification, information or docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents furnished, he shall for reasons to be recorded in writing, reject such application and inform the applicant electronically in Form GST REG - 05; Deemed Registration If the Superintendent fails to take any action- * within a period of three working days from the date of submission of the applicant; or * within a period of seven working days from the date of receipt of the clarification, information or documents furnished by the applicant, the application for grant of registration shall be deemed to have been approved. Issue of registration certificate Rule 10 (1) provides that where the application for grant of registration has been approved a certificate of registration in Form GST REG - 06 showing the principal place of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and additional place or places of business shall be made available to the applicant on the common portal and a Goods and Services Tax Identification Number shall be assigned subject to the following characters- * two characters for the State Code; * ten characters for the Permanent Account Number of the Tax Deduction and Collection Account Number; * two characters for the entity code; and * one check sum character. Effective date of registration Rule 10 (2) provides that the registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted with a period of thirty days from such date. Rule 10(3) provides that where an application for registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation has been submitted by the applicant after the expiry of 30 days from the date of his becoming eligible to registration, the effective date of registration shall be the date of grant of registration. Verification Rule 10(4) provides that every certificate of registration shall be duly signed or verified through electronic verification code by the Superintendent of Central Tax under the Act. Communication Rule 10(5) provides that where the registration has been granted the applicant shall be communicated the registration number and the certificate of registration duly signed or verified through electronic verification code, shall be made available to him on the common portal within a period of three days after the expiry of the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od specified in Rule 9(5). X X X X Extracts X X X X X X X X Extracts X X X X
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