BUSINESS VERTICAL IN GST
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 14-9-2017
Business
Section 2(17) of Central Goods and Services Tax Act, 2017 ('Act' for short) defines the term 'business' as including the following-
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);
(c) any activity or transaction in the nature of sub-clause (a) whether or not there is volume, frequency, continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;
(e) provision by a club, association, society or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;
(f) admission, for a consideration, of p
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re that manages services in hotels-amenities solutions.
Section 2(18) of the Act defines the expression 'Business vertical' as a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals. The explanation to this section provides that the following factors should be considered in determining whether the goods or services are related include-
* the nature of the goods or services;
* the nature of the production processes;
* the type or class of customers for the goods or services;
* the methods used to distribute the goods or supply of services; and
* the nature of regulatory environment (wherever applicable), including banking, insurance or public utilities.
Registration
Section 25 provides the procedure for registration. Section 25(2) provides that a person seeking registration under this
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me person is paying tax under section 9;
* all separately registered business verticals of such person shall pay under the Act on supply of goods or services or both made to another registered business vertical of such person and issue a tax invoice for such supply.
The explanation to this sub-section clarified that where any business vertical of a registered person that has been granted a separate registration becomes ineligible to pay tax under section 10, all other business verticals of the said person shall become ineligible to pay tax under the said section.
Units in SEZ
The proviso to Rule 8(1) provides that a person having unit(s) in a Special Economic Zone or being a Special Economic Zone Developer shall make a separate application as a business vertical distinct from his other units located outside the Special Economic Zone.
Registration procedure
* A registered person eligible to obtain separate registration business verticals may submit a separate application in form
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Account Number, State, mobile number and e-mail address declared in Part A of Form GST REG – 01;
* The applicant shall furnish such clarification, information or documents electronically in Form GST REG – 04 within a period of seven working days from the date of receipt of such notice;
* If the Superintendent is satisfied with the clarification, information or documents furnished by the applicant, he may approve the grant of registration to the applicant within a period of seven working days from the date of the receipt of such clarification or information or documents;
* If no reply is furnished by the applicant in response to the notice issued or where the Superintendent is not satisfied with the clarification, information or documents furnished, he shall for reasons to be recorded in writing, reject such application and inform the applicant electronically in Form GST REG – 05;
Deemed Registration
If the Superintendent fails to take any action-
* within a period of three w
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ation shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted with a period of thirty days from such date. Rule 10(3) provides that where an application for registration has been submitted by the applicant after the expiry of 30 days from the date of his becoming eligible to registration, the effective date of registration shall be the date of grant of registration.
Verification
Rule 10(4) provides that every certificate of registration shall be duly signed or verified through electronic verification code by the Superintendent of Central Tax under the Act.
Communication
Rule 10(5) provides that where the registration has been granted the applicant shall be communicated the registration number and the certificate of registration duly signed or verified through electronic verification code, shall be made available to him on the common portal within a period of three days after the expiry of the peri
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