The concept of ‘Distinct Person’ has been newly introduced under the GST law. Under GST law, a supplier is required to obtain state-wise registration. He is required to obtain registration in every state/UT from where he makes a taxable supply provided his aggregate turnover exceeds a specified threshold limit.
In this respect, Section 25(1) of the CGST Act provides as below:-
“Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such state or Union Territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed.”
It is to be noted that GST registration is PAN based. Thus, where a supplier provides taxable supply from more than one State or UT, he is required to obtain multiple registrations under a single PAN. The registered person is required to get single registration in every State/UT. However, if such registered person has multiple places of business in a State/UT, he has the option to get a single registration for the said State/UT or separate registrations for each place of business in such State/UT.
In this respect, Section-25(2) states:-
“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 place 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.”
Section-25(4) & 25(5) covers the concept of ‘Distinct Person’. These sections are reproduced as below:-
“25(4):- A person who has obtained or is required to obtain more than one registration, whether in one state or Union Territory or more than one State or Union Territory shall, in respect of each such registration, be treated as distinct persons for the purpose of this Act.
25(5):- Where a person who has obtained or is required to obtain registration in a State or UT in respect of an establishment, has an establishment in another State or UT, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.”
In simple terms, the establishments of a person with separate registrations whether within the same State/UT or in different States/UTs are considered as ‘distinct person’. Where a person is having one registered establishment in a State/UT has another establishment in a different State/UT (even if unregistered), these establishments are considered as establishment of distinct persons.
Case Studies on Distinct Persons:-
Case Study-1:- Ram & Company, an architecture firm has its head office in Mumbai (Maharashtra) and has obtained GST registration in the state of Maharashtra. It opened a new branch at Jaipur (Rajasthan) and got registered under GST in the state of Rajasthan as well. Both branches will be treated as ‘distinct person’ for the purpose of the GST. Any inter-state supply between both the branches shall be liable for GST.
Case Study-2:- Ram & Company, an architecture firm has its head office in Mumbai (Maharashtra) and a branch at Pune. It opted for separate GST registration for head office and Pune branch. In such case, both head office and Pune branch shall be treated as ‘distinct person’ for the purposes of GST and any intra-state supply between them shall be liable for GST.
Case Study-3:- X is registered under GST in the State of Maharashtra in respect of his business of garments trading. He also owns a liquor shop in Rajasthan. He need not obtain GST registration in Rajasthan as liquor is a non taxable supply under GST. However, establishment of X in Maharashtra and in Rajasthan will be treated as ‘distinct person’ and therefore any supply of goods or services between them shall be chargeable under GST.
Case Study-4:- Ram & Company, an architecture firm has its head office in Mumbai and branch at Pune. It opted for a single registration under GST in the State of Maharashtra. In this case, Mumbai head office and Pune branch will not be treated as ‘distinct person’.
