A two-year contract in another state

The problem

This is a Mumbai firm that does engineering and construction work and also leases out heavy equipment. They won a good contract: a two-year work order to supply equipment on lease at a project in Uttar Pradesh.

Then the billing question came up. The customer in Uttar Pradesh wanted invoices carrying a UP GST number. The firm only had a Maharashtra GSTIN, because that is where the company lives. To get a GSTIN in Uttar Pradesh you need a place of business in Uttar Pradesh, with documents to prove it.

The obvious answer was to rent an office there. But think about what that means for a leasing contract. Nobody from the firm would sit in that office. The equipment goes to the site, not to an office. They would be paying rent and a deposit for two years on an empty room, just so that one address could appear on a GST certificate.

What we did

We gave them a virtual office in Noida. Noida is in Uttar Pradesh, so an address there comes under UP GST jurisdiction, which is exactly what the registration needed.

A virtual office is a real commercial address that the firm can use as its place of business, with the paperwork a GST officer expects to see: a rent agreement in the company’s name, a no-objection certificate from the owner of the premises, and a recent utility bill for the address. We issued that kit and then filed the GST registration for Uttar Pradesh with the Noida address as the place of business.

The firm did not have to send anyone to Noida. The address, the documents and the filing were handled from Mumbai.

The outcome

The Uttar Pradesh GSTIN was issued. From then on, every invoice for the two-year contract went out from the Noida address, with the UP GST number the customer wanted. The firm paid for a virtual office instead of two years of rent, and never took physical space in the state.

When the contract ends, the address can be kept for the next job in Uttar Pradesh or given up. Either way, there is no lease to unwind.

If you are in the same position

This comes up a lot with contractors, equipment lessors and service companies: the work is in one state, the company is in another, and the customer wants a local GST number on the bill. You do not need an office to get that number. You need a place of business that can pass the officer’s check, and the three documents that prove it.

Pick the address in the state where the work is, not where it is convenient for you. Make sure the rent agreement and NOC are in the company’s exact legal name, and that the utility bill is recent. Then file the registration before the first invoice is due, because the customer will not wait.

Registration references for this engagement can be shared with prospective customers on request.