Multi-state GST registration: where your stock decides

The rule is state-wise, and your stock picks the state

Section 22(1) of the CGST Act, 2017 makes a supplier liable to register in the State or Union territory from where he makes a taxable supply. Not where the company is incorporated, not where the founders sit, not where the buyer lives.

Then section 2(85) defines place of business. Clause (a) covers a place from where business is ordinarily carried on, and it expressly includes a warehouse, a godown or any other place where a taxable person stores his goods. Read the two together and the conclusion is plain. The moment your pallets land in a fulfilment centre in another state and orders ship out of it, that state is a place of business and a supply origin. Section 25(1) then requires you to apply for registration in every such State or Union territory in which you are so liable.

CBIC has said this in terms. A clarification bearing F. No. CBIC-20016/75/2025-GST/1025, dated 25 September 2025, answered a trade representation about a Delhi business storing goods in a third-party cold store in Haryana. The position: where outward taxable supplies are made to customers from that location, a separate Haryana registration is required, and the fact that a third party operates the facility does not change it. We could not retrieve that file from a CBIC-hosted URL and are relying on reports of it, so treat the statutory reasoning as the authority. It rests entirely on section 22 and section 2(85), which you can read yourself.

Does the turnover threshold apply at all

Mostly, no. Section 24 opens with the words notwithstanding anything contained in sub-section (1) of section 22, then lists who must register irrespective of turnover. Clause (ix) covers persons who supply goods or services through an electronic commerce operator required to collect tax at source under section 52. Every large Indian marketplace is such an operator. So a marketplace seller’s duty to register does not wait for a turnover figure.

That has shifted once, and the shift is narrow. Notification 65/2017-Central Tax, dated 15 November 2017, exempted small suppliers of services through an operator. Goods sellers had nothing until Notification 34/2023-Central Tax, dated 31 July 2023, issued under section 23(2) and in force from 1 October 2023. It exempts goods sellers whose aggregate turnover stays within the registration threshold, on conditions. Two of those end the conversation here: the supplier must make no inter-state supply of goods, and must not supply through an operator in more than one State or Union territory. A PAN-based enrolment number, one per state, replaces the GSTIN.

The arithmetic is simple. One state, one marketplace footprint, below threshold: you may be exempt, on an enrolment number. Stock in two states, or orders crossing a state line: the exemption fails on its own conditions and section 24(ix) governs. For completeness, section 22(1) sets the thresholds at twenty lakh rupees and ten lakh for special category states, with a third proviso letting the Government raise it to forty lakh for suppliers dealing exclusively in goods. That was done through Notification 10/2019-Central Tax, dated 7 March 2019, which has since been amended and carries state and product exclusions. We are not printing one current figure, because the operative number depends on your state and your goods.

One live development. At its 57th meeting on 8 October 2026 the GST Council recommended a new rule 14B in the CGST Rules, to let small sellers supplying goods through operators register in a state where they hold no physical presence by declaring the operator’s warehouse as their principal place of business, subject to a monthly input-credit pass-through limit of 2.5 lakh rupees. It is a recommendation. No notification, no effective date. And note what it does not do: it still produces a registration per state. It removes the need for your own premises there.

The three models, concretely

• Self-ship from one state. One registration. Orders to other states are inter-state supplies attracting IGST, which is a rate question and not a registration question. No second GSTIN.
• Marketplace fulfilment with stock in several states. A registration in each state the stock ships from. Amazon’s own Go Local programme is built around this constraint: Amazon says it will introduce a seller to a tax consultant who helps source commercial space that can be treated as the principal place of business, obtain GST registration in that state, and list the fulfilment centre as an additional place of business.
• Stock with a 3PL in several states. Same answer. Not your building and not your staff, but still your stock and still your supply origin. The September 2025 clarification speaks to exactly this.

What each extra registration actually costs

Section 25(4) treats each registration as a distinct person, and everything downstream follows. A separate return cycle per state. A separate electronic credit ledger per state, with no set-off across them. The only cross-state credit route is the Input Service Distributor mechanism under section 20, mandatory since 1 April 2025, and it distributes credit on common input services only. It does nothing for the GST you paid on the goods.

Stock transfers between your own registrations are supplies between distinct persons. Tax invoice, IGST, e-way bill. The IGST leaves the sending state’s ledger now and returns as credit in the receiving state’s ledger later, against output tax you have not earned yet. That is a float, and it belongs in the same conversation as the marketplace payout cycle rather than being treated as rounding.

Decide it as arithmetic, not preference

On one side, the annual cost of a second registration: twelve months of return preparation, the professional fee your CA actually quotes, and credit stranded in that state’s ledger until local output tax absorbs it. We cannot publish a fee, because they vary by city and practice. Use your own quotes, not a number from a blog.

On the other side, what the node buys: freight saved per order against the lane it replaces, and the delivery promise you can sell from it. If the freight and conversion gain does not clear the compliance cost and the credit float, ship longer from one state. Plenty of brands should. The honest reading of regional warehouse placement is that the second node is a tax decision dressed as a logistics decision, and sequence is the whole game. Clear the registration before the stock moves, because the GST and GTIN setup is what stalls a launch, never the pallet.