Add Godown in GST

Overview  

The godown, also referred to as a warehouse, plays a crucial role in any supply chain setup for trading or manufacturing businesses. Therefore, in the case of GST (Goods and Services Tax), businesses having godowns are required to adhere to certain registration obligations and compliance requirements. As per the GST framework, every business having several godowns within a state or in different states has to ensure that each of those locations gets registered or linked under GST.

Registration is essential for proper inventory management and making everything clear legally. Registering a Godown under GST thus assists in ensuring that businesses store goods legally and are tax compliant, which aids the government in tracing the movement of goods. The efficient tracking of goods from production to the final consumer is essential for both the business and government authorities.

Benefits

1. 1. Input Tax Credit (ITC): Registering a godown under GST provides ITC for the goods stored at these locations. ITC stands for input tax credit, and it is a method that allows producers to credit score the taxes paid on enter purchases in opposition to the last legal responsibility of tax cast off at the time of sale but produced by organized purchases.

1. 2. Facilitates Goods Movement: Since the space has been registered, it will have a legitimate tag on it under the GST system, which ultimately leads to faster movement of goods in and out of this space. This avoids revisions or legal bottlenecks while transporting goods from godowns to godowns or godowns to users.

1. 3. Legal Compliance: By registering the godown, it indicates the company or firm is not charged if asked by law for doing its legal duty. If godowns are not registered, it is likely a contravention that can be subject to legal action against the business, including being fined or having their business shut down.

1. 4. Efficient Inventory Management: Proper registration allows better tracking of inventory across multiple locations. Businesses can effectively manage stock levels and monitor their movement, improving operational efficiency.

Procedure

Registering a godown under GST is a straightforward process. Businesses need to follow the steps outlined below:

1. 1) Login to the GST Portal: Visit the official GST portal (www.gst.gov.in) and log in using your credentials.

1. 2) Access ‘Amendment of Registration’: Under the ‘Services’ tab, click on ‘Registration’ and then choose ‘Amendment of Registration Non-core fields’.

1. 3) Add Additional Place of Business: Once in the amendment section, select the ‘Additional Place of Business’ tab and click on ‘Add New’. Here, you need to provide details about the godown, such as the address, contact details, and the nature of business conducted at this location.

1. 4) Upload Required Documents: You will be prompted to upload specific documents, such as proof of ownership or rental agreement, to verify the location of the godown.

1. 5) Submit the Application: After filling in the required details and uploading the necessary documents, submit the application. The authorities will verify the application and issue a confirmation once the registration is complete.

Documents

The following documents are typically required to register a godown under GST:

• 1. Proof of Ownership or Rent Agreement: If the godown is owned, a property tax receipt or sale deed can serve as proof. For rented properties, a valid rent or lease agreement is required.

• 2. Utility Bill: A recent utility bill (electricity, water, etc.) for the premises can be submitted as proof of the location.

• 3. NOC (No Objection Certificate): In cases where the godown is located in a leased property, a No Objection Certificate from the property owner may be required.

• 4. GST Registration Certificate (if applicable): If the business is already registered under GST, a copy of the GST registration certificate must be provided.

FAQ

1. Do I need to register every godown under GST?
Yes, every godown, whether in the same state or in different states, must be registered under GST as an ‘additional place of business’. It is mandatory to include all physical locations where goods are stored for better tax compliance.

2. Can I operate a godown without GST registration?
Having GST registration is always better, as operating a godown without GST registration may invite non-compliance and penalties. This ensures that you keep all your records straight and also get a benefit of input tax credit.

3. What happens if I fail to register my godown?
If a godown is not registered by the business, penalties are likely in the form of fines, etc. Godowns that are unregistered may also come under the legal scanner, which could result in further severe implications.

4. Can I claim input tax credit on goods stored in a registered godown?
Yes, it is one of the main advantages if you register godown under GST, as you will get ITC on such goods and can setoff your purchase taxes paid.