2019 (8) TMI 817 - AAR - GST

Requirement of GST registration - registration for multiple companies from same address - Principal place of business - HELD THAT - There is no prohibition under GST law for obtaining GST registration to a shared office space or virtual office, if the land lord permits such sub leasing as per the agreement. Each co-working space is demarcated with different suit number or desk number. As the GST registration is based on PAN, identification of tax payer is not a difficult thing. While applying for GST registration for the co-working space, the rental agreement with the land lord and lessee along with the agreement between lessee and sub lessee must be uploaded as proof of address of principal place of business of respective suit or desk number - The GST number assigned to each co-working space must be displayed at a prominent location and books of accounts relating to the activities or business are to be kept in the principal place of business. Thus, separate registration can be allowed to multiple companies functioning in a ' co-working space and which provide services alone. Such companies shall upload the rental agreement with the land lord and lessee. If there is any sub-lease, then rental agreement between lessee and sub lessee should also be uploaded as proof of address of principal place of business of respective suit or desk number assigned to them. In addition to this, the applicants can upload a copy of monthly utility bill in connection with payment towards electricity charges, water charges or other common services availed by the respective suit or desk number.

Summary

Issues:
1. Whether GST registrations are allowed for multiple companies from the same address in a co-working space model?

Analysis:
The case involved a business engaged in sub-leasing office spaces as co-working spaces to clients. The applicant sought an advance ruling on whether multiple companies from the same address in a co-working space could obtain separate GST registrations. The applicant highlighted that start-up companies found it unaffordable to lease independent offices in big cities, making co-working spaces a cost-effective solution. The issue arose when registration applications were rejected due to existing registrations at the same address. The applicant argued that separate registrations should be allowed as each company maintained distinct financial records and operated as separate entities within the shared space.

The ruling authority examined the evolving trend of co-working spaces as a viable option for start-ups and the shared office culture replacing traditional office setups. It emphasized that there is no prohibition under GST law for obtaining registrations in shared or virtual office spaces, provided the landlord permits sub-leasing. Each co-working space must be demarcated with different suit or desk numbers, allowing for easy identification of taxpayers based on PAN. To apply for GST registration, the rental agreement with the landlord and lessee, as well as agreements between lessee and sub-lessee, must be uploaded as proof of address. Additionally, monthly utility bills related to electricity and other services must be submitted to establish the separate identity of each co-working space.

In conclusion, the ruling stated that multiple companies operating in a co-working space and providing services alone can obtain separate GST registrations. The companies must submit necessary documentation, including rental agreements and utility bills, to demonstrate their individual presence within the shared space. This ruling aimed to facilitate start-ups and service sector companies in obtaining GST registrations while operating from co-working spaces, ensuring compliance with GST rules related to the principal place of business.