It is one of the most awaited rulings given by the AAR and it shall be considered as landmark ruling for GST registration in India since it has shut down the prevailing interpretation of GST registration law.
AAR has ruled that no separate GST registration shall be required even in case godowns are situated in different states, and only a single GST registration will work. This judgment will have a far-reaching impact on the well-settled supply chain of the business.
Let us understand this judgment in great detail;
Facts of the case
The applicant is an importer of non-coking coal and a manufacturer of petroleum products with Head Office/Registered Office at Mumbai. The applicant is engaged in trading activity of Non-coking Coal in various states and importing the said coal at various ports in India and also purchasing from dealers within India from various states. Here are following important facts in this regard;
The said coal is imported at various ports situated in various states and they are registered with GST department in all such places.
Company has submitted that coal shall be imported by them and stored in the various states under Maharashtra GST Number and that they shall also sell the same under the Maharashtra GST Number.
They want to cancel the GST number of different states and do business from their Head Office/Registered Office at Mumbai under the GSTIN of Maharashtra.
They have submitted that they obtained provisional GSTIN in the various states only because they were registered in those states under the earlier VAT regime as required under the VAT Laws.
Important facts of AAR Ruling
Company has submitted that they will be importing the said goods at various Indian ports but with Mumbai Head Office/Registered Office at Mumbai GSTIN and after importing the goods the same will be stored at godowns in various states and they want to clear the goods from the warehouses/godowns in the name of their Mumbai Head Office/Registered Office at Mumbai.
Formulated question of law
Whether the applicant can adapt the procedure to raise the Invoice from Mumbai Head office for import received at various ports, located in various states in India and charge IGST from Mumbai to our customers in various state is proper or not?
Analysis by AAR
AAR rules that the present case is related to chapter VI of CGST Act, 2017. As per Section 22 of CGST act, 2017, persons who are liable for registration and as per Section 22 (1) — “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………….”
In our case, the place of supply is the location of the importer who is situated in the State of Maharashtra and hence the applicant will be clearing the goods by paying IGST from their GSTIN issued in Mumbai, Maharashtra. Since the applicant will be storing the goods, after import, in various states for further sales, whether that would be interstate or intrastate supply would depend upon the place of supply of goods as per Section 10 and Section 11 of the IGST Act, 2017.
Therefore, the opinion of AAR is that the place from where the applicant makes a taxable Supply of Goods shall be his location, in this case, the Mumbai Head Office/Registered Office at Mumbai and even if the applicant has godowns in different states.
The applicant can clear the goods on the basis of invoices issued by the Mumbai Head Office/Registered Office at Mumbai on payment of IGST in the State of Maharashtra and therefore they need not take separate registration in other states. This would answer their question mentioned above.
Order by AAR
So, as per the complete analysis, applicant i.e. the company is not required to have separate GST registration in each state and only single registration in the state of Maharashtra will work.