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Exemption from Registration in One State in the case of Multi-State business


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PQR Company has two units in the State of Maharashtra and Karnataka

  • having a intra-state turnover of supply of taxable goods in Maharashtra of Rs.25 lacs and
  • intra-state turnover of supply of taxfree goods in Karnataka of 10 lacs
  • As the PQR Company‚Äôs Aggregate turnover exceeds RS.20 lacs, the Company has taken registration in Maharashtra State.

Section 23(1) of CGST Act exempt person from registration who is engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act.

Section 25(5) of CGST Act prescribes that "Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act."

Whether the PQR Company needs to take registration in Karnataka or it can avail exemption under section 23(1) from Registration as the total turnover in Karnataka State is of tax-free goods treating Karnataka unit as distinct person ?

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