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Separate registration in different states under renting of immovable property

manish (student) (187 Points)

04 May 2022

Respected Sir, Please Give your advice, whether I have to take separate registration number for each of immovable property located in different states in case renting of immovable property service. whether the land owner will have to take GST registration in different States which is undisputedly the place of supply or instead whether the land owner can takeGST registration in Delhi which is his usual place of residence and treat it as interstate supply and accordingly charge IGST.

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8 Replies

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 05 May 2022

No.... no need to obtain registration in very state where the property is located .

In term of Section 22 (1) Every Supplier is liable to be registered under this Act From Where He Make Taxable Supply of Goods or Services.
So as per above the clause "From where" in your case is Dehli .

As per Section 12(3) of IGST the place of supply of service in relation to an immovable property shall be the location at which the immovable property is located.

So you need to charge IGST in bill for property located out of Delhi.

Note : Disadvantage : As the section 12(3) prescribe the POS is the location of Property situated, the credit of ITC will not be available on the Inward supply in respect to property situated out of Delhi.

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Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 05 May 2022

GST registration depends on various factors.

The main intention behind the statewide registration is many taxes are subsumed into GST . State Govts may have loss of revenue.

For outside Delhi :

Place of Supply: Location of immovable property
Service Receipt: Location of Immovable property
Location of Supplier: Location of immovable property

Since property situated outside Delhi and Supply is outside India and consumption is outside India .

GST is destination based Supply.

CGST and SGST is applicable

So discuss with GST dept and take statewide registration if required to avoid ambiguity

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 05 May 2022

Dear Eswar Reddy

There is no ambiguity therein .
You mean to say that if Iam Contractor need to get my self registered in every state where I got the contract .... even the contract period is of 2 to months .

It's clearly prescribed in law that registered person where he is registered can supply goods & services to any state & not required take registration in state where he is supplying goods or services.
Why IGST statue is brought into the law .... As per Section 7 of IGST it is applicable only when you made interstate supply .

Yes GST is ofcourse an consumption based tax & to make it consumption base , Rule for Place of Supply there in Law & as per Place supply only the IGST/CGST/SGST is applicable.
Note : The POS are relevant only to determine the nature of Supply in GST as either Inter-state or Intra-State , the same will not hold any relevance for determining the place where registration is required to taken.

So he can take registration only in Delhi from there he can supply by charging IGST to other state .
Let's suppose Iam in Delhi & I have property in Chandigarh which is being rented to you .
Now if I make a bill by charging you CGST/SGST to you , can you claim ITC on the same ???? My GSTN is of Delhi . It won't , in your 2B credit will be restricted for the reason of wrong POS .

In this regard you can Refer FAQ on Immovable property release by CBIC , Question No. 1. in which they clarify that Person in Delhi having property in Noida can get himself registered in Delhi & can supply service by charging IGST.
There many AAR in this regard .

So he need not required to take registration in every state the exception is only the claiming ITC on inward supply in regard to property.

Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 06 May 2022

Your point is very valid.

You can supply goods or services to other states but in few cases supply can't be done from the place of registration..

Take this example:
Suppose you are seller of mobile phones in Delhi and you have few outlets in Chennai.

If mobile phone is sold from Chennai then SGST & CGST should be charged since receipient is in Chennai , Seller is in Chennai. Just because you have Registration in Delhi , IGST concept doesn't work every time.

State Govt of GST dept raise objection since they loose share of GST .

So you have to contact GST dept

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 06 May 2022

Dear Eswar

What do mean by concept doesn't work every time ..... the reply by me is prescribed in Act .
If iam registered in Delhi & Recepient is Chennai , mobile being sold from Delhi to Chennai , IGST will be applicable.
But in case of Hotel located in Delhi & services provided to Recepient from Chennai, the Hotel will always charge CGST/SGST , cannot charge IGST because it being prescribed in law POS is always is location where immovable property is situated.

Moreover the Query is in regard to registration supplier registered in Delhi having rented immovable property in different states , is liable to obtain registration in every state where his property is situated. Thus I have given enough reference through Act , FAQ, AAR , that he can supply service from Delhi by charging IGST to services being provided in different states.

Plz do refer the above mentioned section (Section 22 of CGST Act , Section 12(3) of IGST Act ) & FAQ .
Can also refer Adavance Ruling M/s JAIMIN ENGINEERING PRIVATE LIMITED -Rajasthan AAR