Definition of Business Vertical
By: – Pradeep Jain
Goods and Services Tax – GST
Dated:- 30-1-2017
DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN
Definition of Business Vertical
Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:-
2(18): Business Vertical: The new definition reads as follows:
“business vertical” means a distinguishable component of an enterprise that is engaged in supplying an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business verticals;
Expl
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inition. But the definition itself seems to be a complicated definition to understand. A preliminary interpretation led to a belief that as like the current system of registration in excise and service tax where separate registration is taken for separate premise, the new regime will also provide a similar facility. It is expressly stated in the new law that the business verticals situated in the same State will have an option to avail single or separate registration for all such business verticals. A very important thing to note here is that the term used here is business vertical and not business premise. Thus the definition becomes critical altogether when it comes to registration.
A business segment is a part of the company that can be
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it of separate registration or not. There is no specific provision in this regard and it is not clear that whether all the business verticals located in the same premises can be registered separately or not. However, if one looks into the practical aspect, it is found that for registration, details of constitution, name, bank account etc. is to be given by the assesses. This indicates that different business segments in the same premises may be separately registered only if the bank account is separate and separate accounting is being done for the said business as risks and returns are also required to be different. Moreover, practically assessees would avoid taking separate registration as taking separate registration will increase the adm
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