Registration and Current Bank account for Non-GST proprietorship

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Mayank

Self Employed

29 Points Posted on 07 May 2021

Hi. I want to open a sole proprietorship to sell books on Amazon (which are GST free). To sell under a firm name, I need to register as a proprietorship. However, no bank is ready to open a current account under the firm name without a GST. They say you can bring an MSME certificate as that will do. But in the MSME registration form, they ask for the bank details of the firm.

It is circular. A non-GST proprietorship can't open a current account without an MSME certificate. And without a current account under the name of the firm you can't get an MSME certificate. What is to be done first? I don't understand.

Replies (2)

Quick Summary

This discussion addresses the common challenge faced by non-GST registered proprietorships trying to open a business bank account. Banks often require a GST number or MSME certificate, but obtaining these can be a catch-22 without a prior business bank account. The advice suggests either obtaining a GST number first (even if not strictly required for your business) or exploring registration via a Shop and Establishment agent to satisfy bank requirements.

CA Raj Doshi

Practising CA

8954 Points Posted on 08 May 2021

Yes. Times are tough for a Sole Proprietorship who doesn't want to register under GST. Bank don't understand and MSME guys want current account.

I will share what I think might help you.
Answer 1 -
Amazon will want a GST registered seller generally. So first step is to take a GST number ( you don't need a bank account for that ).
After that, go to the bank and open a current account with GST certificate.

Answer 2 -
If Amazon is ok with a non-GST seller, then catch hold of a shop and establishment agent who would get that registration for you and you would be able to open the bank account then.

Trust this clarifies and helps.

Regards
CA. Raj Doshi

Palav Jainn

2 Points Posted on 16 June 2023

However, lets say i have a firm where i trade in printed books. Printed books are exempted from GST. I can obviously apply for an online certificate under Shop Establishment but since its a self-generated online certificate, the bank won't accept it. I cannot register under GST since i am exempted and i dont want to incur unnecessary expenses on my firm. I cannot register for MSME or even an EXIM License since it required a current account in the name of firm. What to do ?