Co-working spaces growing in India at a fast pace. Startups, small and medium-sized enterprises (SMEs) and even multinationals are based in co-working spaces. A co-working space provides work on a plug and play model which is convenient as well as cost effective for businesses.

This co-working concept has posed a challenge for GST authorities when it comes to providing GST registration. GST authorities so far have been hesitant in providing registration to businesses working from a co-working space. Most often the reasons for rejection was that the co-working space could not be considered as “principal place of business” as per the GST law. To further this reasoning the GST department contended that there were other companies in the same space and hence it could not act as principal place of business.

Recently, a co-working space in Kerala petitioned the GST Authorities to permit the registration for businesses based out of co-working spaces. The co-working space argued that hiring full-fledged offices in big cities is unaffordable due to high rental charges. Due to this reason many startups prefer co-working spaces. The following questions were raised by the co-working space in its petition to the GST Authorities:

  1. Can GST registrations be allowed for multiple companies from the same address?
  2. Can registration be denied even if they follow all GST rules regarding “place of business?

The GST authorities ruled that there is no prohibition under GST law for obtaining GST registration to a shared office space or virtual office, if the land lord permits such leasing as per the agreement. Further, the GST authority ruled that every business seeking registration shall upload the following:

  1. the rental agreement with the landlord
  2. if there is a sub-lease, then rental agreement between lessee and sub lessee
  3. monthly utility bill in connection with the payment of electricity charges or water charges

This ruling is a relief for businesses working out of a co- working space and will enable to obtain GST registration henceforth.

Running a business in India is not an easy task. It involves a constant investment of both time and effort as well as technical capabilities of knowing the various statutory compliance and regulations.

But many early businesses struggle with the multitude of compliances that are part of doing business in India. Our advisors at Integra Books can help you ensure you do the right things at the right time

The most frequent problems that business owners face are to do with accounting & regulatory compliance. Entrepreneurs view time invested in doing both as unproductive time.

34, Manikanta Sankeerana

Complex, 1st Floor Gangamma Temple St.