As we all know, GST stands for Goods and Service Tax. This is a unified Indirect tax which is implemented from 1st July 2017 in India. Fundamentally, the Indirect tax is a tax levied on goods and services rather than income and profits. Furthermore, It is mandatory to have GST Registration when annual turnover exceeds INR 40/20 lakh or supply goods and services inter-state or through an E-commerce platform. As per the GST Rules, A proprietor can’t take 2 Gst Registration within same State on 2 different business names. Find out why?
Decoding the GSTIN
GSTIN is an abbreviation for Goods and Service Tax Identification Number. It consists of 15 alphanumeric digits. This is generated by the GST Authority after you have successfully applied for GST Registration.
The format of GSTIN is as follows-
- The first two digits reflect the state code. Every state and territory of India has its own code. For instance, the numbers 03 and 07 represent Punjab and Delhi, respectively.
- The following ten digits are the taxpayer’s or business’s PAN number.
- The 13th digit stands for the number of registrations for the same PAN in a certain state. It will be a digit in the alpha-numeric range (first 1-9 and then A-Z)
- By default, the 14th digit is the letter ‘Z.’
- The final digit is a check code that is used to detect mistakes. It might be a letter or a number and is completely random.
What is Sole Proprietorship Registration?
A sole proprietorship is a type of business entity that is owned, managed, and controlled by a single person who receives all profits and bears all risks. The phrase itself demonstrates this. The term “sole” means “only,” while “proprietor” means “owner.” As a result, a single proprietor is the only owner of a firm.
It is entirely up to the individual to choose whether or not to register his or her sole proprietorship. Banks, on the other hand, primarily require GST Registration as a business registration proof for sole proprietor business if you want to open a Current bank account in your business’s name.
It is important to note that if you have limited finances and resources, a sole proprietorship is an easiest and quickest way to start your business. Furthermore, it is the most practical form of business if you wish to carry out your business strategy with the fewest legal requirements and lowest operating costs.
A PAN Number for Sole Proprietorship Business
Sole Proprietorship do not get a separate PAN Card like other business entity formations such as Private Limited Company Registration or LLP Incorporation, etc.
The reason is a sole proprietorship business is directly related to the business owner and does not have a separate legal entity. Therefore, you can only use your personal PAN Card for getting Sole Proprietorship Registration.
Furthermore, you can use your same PAN card for MSME Registration, GST Registration, or IEC Code Online Registration.
Know the reasons why a proprietor can’t take 2 GST Registration within same state on 2 different business name
As per the GST Regime, GSTIN Number 3rd-12th digit depends on business PAN Number. Hence, GST Portal cannot update the two different business trade names at the same PAN Number. Accordingly, there can only be one GST Registration against a single permanent account number (PAN) for Sole Proprietorship Business in the same state. Thus, A sole proprietor can’t take 2 GST within the same state on 2 or more different businesses.
If you want any other guidance relating to the Sole Proprietorship Registration, please feel free to talk to our business advisors at 8881-069-069.
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