GST Registration for Business Branches in Multiple States

The Goods and Services Tax (GST) is a unified indirect tax system applicable throughout India, replacing multiple state and central taxes. It aims to streamline taxation and create a common national market. Businesses that have branches in more than one state must register separately in each state under the GST law. This is a legal requirement and helps ensure proper compliance. It also allows businesses to claim Input Tax Credit and operate transparently without facing penalties or disruptions. In this blog, you will learn about the GST Registration for Business Branches in Multiple States.

What Does Having Branches in Multiple States Mean Under GST?

When a business has branches in multiple states under the same PAN, each location is considered a distinct place of supply under the GST law. As per Sections 22 and 25 of the CGST Act, a business must obtain a separate GST registration for every state in which it is involved in taxable sales or services. Although the PAN remains constant, each registration is assigned a unique GSTIN. The first two digits of the GSTIN represent the respective state code, ensuring clear tax identification and compliance.

If a business has multiple branches within the same state, it can include them as “additional places of business” under one GST registration. However, if the business has different verticals, it may choose separate registrations under Rule 11 of the CGST Rules.

Having branches in different states means the business must take separate GST registrations for each state. This ensures proper tax compliance, accurate supply reporting, and smooth functioning under the GST law.

Is Separate GST Registration Mandatory for Each State?

Yes, businesses must obtain separate GST registrations for each state where they have branches or conduct business operations. This requirement is part of the GST law and ensures that the business complies with the tax regulations specific to each state. Separate registration helps in the accurate reporting of transactions such as sales and purchases within each state. It also simplifies tax management, reduces confusion, and protects the business from potential penalties or compliance-related issues.

Procedure to Obtain GST Registration for Business Branches in Multiple States

Below is the step-by-step process to obtain GST registration for business branches in multiple states:

Step 1: Apply Separately for Each State

A business registers for GST in each state where it carries out taxable operations. It uses Form GST REG-01 for every state application. The Permanent Account Number (PAN) remains the same, but each registration results in a unique GSTIN. This GSTIN includes the state code, PAN, and entity code. The business must access the official GST portal to start the process. It selects the relevant state, fills out basic details, and verifies contact information through OTP.

Step 2: Upload Required Documents

On April 17, 2025, the Central Board of Indirect Taxes and Customs (CBIC) released Instruction No. 03/2025-GST, outlining the necessary documents businesses are required to provide.

For the principal place of business, the business provides:

• Electricity bill, municipal record, or property tax receipt (any one document)
• If the place is rented, it adds a rent or lease agreement and a utility bill in the owner's name
• If the owner is not registered, then the business adds the owner's ID proof (such as Aadhaar or PAN)

For a shared or consent-based location, it provides:

• A consent letter from the property owner
• The owner's ID proof and property ownership proof

The CBIC restricts the officer from asking for any extra documents beyond what is mentioned in REG-01. This improves transparency and reduces delays.

Step 3: Submit Constitution and Signatory Proof

The business submits only those documents that prove the type of organisation. Examples include:

• Partnership deed for partnership firms
• Certificate of incorporation for companies
• Registration document for societies or trusts

It also adds the details of the authorised signatory. This person verifies the application and handles GST-related communication. The business provides the ID proof and photograph of this person, along with a board resolution or letter of authorisation. There is no need to submit optional documents such as Udyam registration or MSME certificates.

Step 4: Officer Verification and Approval Timelines

GST officers approve the application within 7 working days if everything is in order. If the application raises any concerns, such as a mismatch in documents or a lack of Aadhaar authentication, the officer marks the case for physical verification. In such a case, the officer completes the inspection and approves or rejects the application within 30 days.

If the officer needs more clarification, they issue a notice in Form GST REG-03. The business must respond through Form GST REG-04 within 7 working days. If the business fails to respond, the officer rejects the application through Form GST REG-05.

Step 5: Register as an Input Service Distributor (ISD)

The GST Council mandates that any business with multiple state registrations must register as an Input Service Distributor (ISD) from April 1, 2025. ISD registration allows a business to receive invoices for services at a central office and distribute the eligible Input Tax Credit (ITC) to branches in other states.

The business submits a separate application under Form GST REG-01 and selects the ISD option. This step helps the business manage credit efficiently and maintain transparency in tax records.

Can a Business Have Multiple Registrations in the Same State?

Yes, a single GST registration is allowed for multiple businesses if they are in the same state and engage in similar business activities. These units are treated as separate verticals under one GSTIN. This setup simplifies overall tax compliance. It also reduces administrative work and helps the business file returns more easily and accurately.

GSTIN Format and Branch Coding

Here are the GSTIN format and branch coding explanation:

1. First Two Digits – State Code

The GSTIN starts with two digits that represent the code of the state where the business is registered. Each state and union territory has a specific code based on the Indian Census. For example, the code for Maharashtra is 27, and the code for Delhi is 07. This code helps identify the location of the registered place of business.

2. Next Ten Digits – PAN of the Business

The next part of the GSTIN contains ten characters that match the Permanent Account Number (PAN) of the business. This section confirms the taxpayer's identity. Every GSTIN issued to a business under a specific PAN contains the same ten-digit PAN in the middle. This ensures that all GSTINs link back to the same legal entity.

3. Thirteenth Digit – Branch or Registration Number

The thirteenth digit indicates the number of registrations taken under the same PAN within a state. The first registration uses the number 1, the second uses 2, and so on. If a business opens another branch in the same state, the GSTIN for that branch changes only this digit. This digit increases with every new registration within that state.

4. Fourteenth Digit – Default Character

This digit usually appears as the letter “Z”. It serves as a system-defined character and does not hold any specific business information. The government reserves this digit for future use or special classification. In regular registrations, it always appears as “Z”.

5. Fifteenth Digit – Checksum Digit

The last digit of the GSTIN is an alphanumeric character used to validate the accuracy of the GSTIN. The system generates this character through a formula based on the first fourteen characters. It helps detect errors in GSTIN entries and ensures that the GST number is correctly structured.

Branch Coding Explanation

Every branch of a business that operates in a different state or as a separate vertical within the same state receives a unique GSTIN. The PAN and state code parts remain the same if the branch is in the same state. The thirteenth digit changes to reflect the sequence of registration under the same PAN. This structure ensures that each GSTIN remains unique and traceable to the exact business location.

Returns Filing for Multi-State GST Registrations

Here is a detailed explanation of returns filing for multi-state GST registration:

1. Each GSTIN Requires a Separate Return

When a business operates in more than one state, it registers for GST in each state separately. Every GST registration (GSTIN) needs its own set of GST returns. A business files GSTR-1 and GSTR-3B for each GSTIN, based on the transactions that take place in that specific state. No state can file for another. This ensures clear tracking of tax collection and input credit across states.

2. GSTR-3B Becomes Locked After Filing

From July 1, 2025, the GST system will not allow any changes once GSTR-3B is filed. After filing, the form locks automatically. A business must check and verify all details before submission. If a correction is needed, it uses GSTR-1A. The government sets the deadline for GSTR-1A as the 14th of the following month. Any mismatch affects the buyer’s GSTR-2B and input credit.

3. ISD Mechanism for Service Input Credit

If a company receives input services centrally but uses them across different state branches, it must register under the Input Service Distributor (ISD) category. The head office files GSTR-6 every month. This form shows how input tax credit is shared with branches based on their turnover. ISD helps in the equal and fair distribution of service tax credits to each branch.

4. Three-Year Time Limit for Filing Old Returns

The government introduces a new rule on July 1, 2025. A business cannot file returns that are more than three years old from their due date. The GST portal blocks such returns. The rule applies to all types of returns, including GSTR-1, 3B, 4, 6, 7, 8, and 9. All pending old returns must be filed before June 30, 2025. This rule improves compliance and prevents backlog.

Penalties for Non-Compliance

Listed below are the penalties for Non-compliance:

• Tax Evasion or Fake Invoices (Section 122): The penalty is Rs. 10,000 or the actual tax amount evaded, whichever is higher. This includes cases where businesses issue fake invoices or do not register under GST despite eligibility.
• Unintentional Errors (Section 122(2)): If a taxpayer makes a genuine mistake or fails to report details correctly (without fraud), the penalty equals 10% of the unpaid tax, with a minimum of Rs. 10,000.
• Fraudulent Activities (Section 122(2B)): If a person suppresses facts or deliberately misreports, the penalty equals the amount of tax evaded or Rs. 10,000—whichever is more.
• Supporting Tax Evasion (Section 122(3)): If a person helps someone commit GST fraud or does not attend a legal summons, the penalty can reach Rs. 25,000.
• Other Offences (Section 125): A general penalty of Rs. 25,000 applies for violations not specifically covered under other sections.
• Delayed Return Filing (Section 47): The late fee is Rs. 100 per day (Rs. 50 CGST + Rs. 50 SGST), capped at Rs. 5,000. Nil return attracts Rs. 20 per day.
• Interest on Late Tax Payment: Interest applies if tax is paid after the due date, even if the delay is unintentional.
• Imprisonment for Serious Cases (Section 132): Tax evasion above Rs. 5 crore attracts jail for up to 5 years. Lesser amounts attract 1 to 3 years, depending on severity.
• GST Amnesty Scheme (Section 128A): The government waives penalty and interest if tax is paid in full before 31 March 2025 under eligible non-fraud cases.

Conclusion

GST registration for business branches in multiple states is essential for smooth functioning and legal compliance. Each branch located in a different state must obtain a separate GSTIN, even if the PAN remains the same. This ensures accurate tax reporting and promotes transparency. Proper understanding of GST rules, formats, and procedures allows businesses to expand across states while meeting all statutory obligations and avoiding unnecessary penalties. If you want to do a GST registration for your business, get in touch with Online Legal India to get assistance.

FAQ

Q1. Is separate GST registration required for each state where a business operates?

Yes, businesses must obtain separate GST registrations for each state where they have a branch making taxable supplies, as per Sections 22 and 25 of the CGST Act.

Q2. Can a single GSTIN be used for multiple branches in the same state?

Yes, multiple branches in the same state can operate under one GSTIN. These branches must be declared as “additional places of business” under that registration unless separate verticals are formed.

Q3. Can a business obtain multiple GSTINs in the same state?

Yes, if a business has distinct verticals as defined under Rule 11 of the CGST Rules, it can apply for separate GST registrations within the same state for each vertical.

Q4. How does the GSTIN format identify branches in different states?

The initial two digits of a GSTIN indicate the specific code assigned to the state. This allows identification of the state where the branch operates. This helps in state-wise tax administration.

Q5. What are the penalties for not registering branches separately under GST?

Failure to register a branch in another state can attract a penalty of Rs. 10,000 or the tax amount evaded, whichever is higher, as per Section 122 of the CGST Act.