Term business vertical under GST

Meaning of term business vertical under GST


In this article, the information about business vertical is explained

Business vertical in GST:

As per Section 18 of CGST Act, 2017 “business vertical” means 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.

Explanation.––For the purposes of this clause, factors that should be considered in determining whether goods or services are related include––

a)      the nature of the goods or  services;

b)     the nature of the production processes;

c)      the type or class of customers for the goods or  services;

d)     the methods used to distribute the goods or supply of services;  and

e)      the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities;

Separate registration for multiple business verticals within a State or a Union territory.-

  1. Any person having multiple business verticals within a State or a Union territory, requiring a separate registration for any of its business verticals under sub- section (2) of section 25 shall be granted separate registration in respect of each of the verticals subject to the following conditions, namely:-

                                 i.            such person has more than one business vertical as defined in clause (18) of section 2;

                               ii.            the business vertical of a taxable person shall not be granted registration to pay tax under section 10 if any one of the other business verticals of the same person  is paying tax under section 9;

                             iii.            all separately registered business verticals of such person shall pay tax 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.

Explanation.- For the purposes of clause (b), it is hereby 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.

  1. A registered person eligible to obtain separate registration for business verticals may submit a separate application in FORM GST REG-01 in respect of each such   vertical.
  2. The provisions of rule 9 and rule 10 relating to the verification and the grant of  registration shall, mutatis mutandis, apply to an application submitted under this  rule.

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