The Central Board of Indirect Taxes and Customs (CBIC) has stated that an importer with its head office in one state but warehouse in another must obtain GST registration in the state where the warehouse is located, even if it is managed by a third party.
The clarification came in response to a representation made by the Kirana Committee of Delhi, which sought clarity on whether a business based in Delhi storing goods in a third-party cold storage facility in Haryana would need to register under GST in that state.
CBIC explained that as per Section 2(85) of the CGST Act, 2017, the term 'place of business' includes any premises where business activities are ordinarily carried out, including warehouses and storage facilities. "Under Section 22, every person making taxable supplies from a State is liable to register in that State, provided their turnover exceeds the prescribed limit," the board stated.
The communication further clarified that when goods are stored in Haryana and dispatched to customers from those facilities, the warehouse effectively becomes a place of business, regardless of whether it is owned or operated by the importer. "The fact that the cold storage is managed by a third party does not change the legal position if supplies originate from that location," CBIC emphasized.
Accordingly, importers and businesses storing goods across state lines must obtain separate GST registration for each state where supplies originate. Establishments under the same PAN in different states are treated as distinct taxable persons, which means movement of goods between such states must be supported by valid tax invoices and e-way bills, and applicable GST must be paid.
The CBIC also clarified the treatment of place of supply:
- Intra-state supply: Movement of goods within the same state as the warehouse will attract CGST and SGST.
- Inter-state supply: Dispatch of goods to other states will attract IGST.
Furthermore, cold storage services are regarded as services related to immovable property, making the location of the warehouse the place of supply for such services - thereby attracting the CGST and SGST of that particular state.
A tax expert noted that this clarification may increase compliance obligations for businesses using third-party warehouses. "Earlier FAQs and rulings suggested that third-party storage may not qualify as a fixed establishment, but this clarification changes the practical approach. Businesses may now need to maintain separate records, issue distinct invoices and e-way bills for inter-state transfers and file returns for each registration," he explained.
He further added that companies might need to reassess their logistics and warehousing strategies, possibly relocating storage or renegotiating third-party contracts to minimize registration exposure and compliance costs.
This clarification is expected to have a wide impact across sectors, especially for FMCG, pharmaceutical, and e-commerce businesses that rely heavily on distributed warehousing networks.
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