Introduction to GST Registration for Two Companies

Many entrepreneurs wonder if they can have two companies, one registered with GST (Goods and Services Tax) and the other not registered with GST. This article aims to clarify the rules and requirements under the GST framework in India, making it easy for business owners to understand whether they can or cannot have two such companies.

Can One Person Have Two Companies with Different GST Status?

The answer is yes, you can have two companies under different GST statuses, provided you have separate GSTIN (Goods and Services Tax Identification Number) for both entities. Each company must have distinct PAN (Permanent Account Number). If you wish to register both companies with the same PAN, they will need to share the same GSTIN.

GST Registration Requirements

According to the GST law in India, any person whose aggregate turnover, calculated on a pan-Indian basis, exceeds Rs. 20 lacs (or Rs. 10 lacs in special category states) is liable to take registration under GST. This aggregate turnover applies to all the business units under the same PAN. If the aggregate turnover threshold is crossed, even if the individual Turnover of each unit in a respective state is lower, registration is mandatory for all locations.

Since each company must have a separate PAN, they can obtain a different GSTIN. If one company operates without exceeding the Rs. 20 lacs turnover, it may not be required to get GST registered for the current financial year. However, this requirement can change based on changes in the turnover.

Managed Companies and PAN Requirements

When it comes to firms registered with the ROC (Registrar of Companies) and Income Tax Department, each company should have its own separate PAN. This means that they can also get different GSTINs. A firm, in the context of a business, is a collective entity formed by two or more individuals. A proprietary firm must ensure that all its dealings are covered under the GST. Proprietorship concerns, once registered, cannot exclude any turnover from their GST filings.

Common Practices and Exemptions

It is common practice for business owners to operate various firms with or without GST registration from the same address. However, if that firm is operating in the context of a wider business structure, each entity must follow the guidelines laid out by GST. Some exemptions or benefits are available for firms with different PANs, allowing each to operate under its own turnover limit.

For instance, if a proprietorship concern decides to register one of its units under GST but not the other, the unit not registered with GST cannot be excluded from its business turnover calculations. The entire business dealing is covered under the GST framework, ensuring compliance and transparency.

Conclusion

While it is possible to have two companies with different GST statuses, it is crucial to adhere to the guidelines and thresholds. Each company must have its own PAN and GSTIN to ensure compliance. Understanding and adhering to these regulations will help in the smooth operation and growth of your business.

Keywords: GST Registration, PAN Differentiation, GSTIN Requirements