Additional Place of Business: Marketplace Warehouse Queries

In short

• A marketplace warehouse counts as your place of business. When your stock sits in a marketplace's fulfilment centre, that centre is a place where you keep goods. It must be declared on your GST registration as an additional place of business (APOB), under the GSTIN of the state it is in.
• Officers check these addresses. They verify places of business physically and by comparing records. The queries usually come as:
  • a request to explain an address;
  • a physical verification report;
  • in serious cases, a show cause notice for cancellation or a suspension of registration.
• Prepare in advance. The defence is a registration that lists every warehouse, a consent letter from each marketplace, and stock records for each place.

The law behind it

• Section 25 of the CGST Act requires registration in every state from which you make taxable supplies. A warehouse in another state where your goods are stored and dispatched therefore needs its own GSTIN.
• Section 28 and rule 19 cover adding or changing a place of business. You file an amendment in Form REG-14 on the portal.
• Rule 25 lets the officer physically verify a place of business. The officer can do this before registration (for example, when Aadhaar authentication is not done) or "for any other reason after grant of registration". The verification report, with photographs, is uploaded in Form REG-30.
• Section 35 requires books and records to be kept at the principal place of business. Where there is more than one place of business, the records for each place are kept there.
• Rule 18 requires the registration certificate to be displayed at every place of business.
• Section 29 and rule 21 allow cancellation where a person "does not conduct any business from the declared place of business". Under rule 21A, the officer can suspend the registration while cancellation is considered.

Why ecommerce sellers receive it

• Stock sent to a marketplace fulfilment centre (FBA, Smart Fulfilment and similar) that is not listed. The marketplace knows the address. Its GSTR-8 and your e-way bills show supplies dispatched from that state. Your registration does not list the address.
• A fulfilment centre the marketplace has added, moved or closed. Marketplaces change their warehouse networks. Your registration still shows last year's list.
• Physical verification found "no business at the address". Fulfilment-centre staff may not recognise your trade name when an officer visits. The report then records the place as non-existent.
• Stock transfers. Sending goods from your own GSTIN in one state to your GSTIN in a warehouse state is a supply between distinct persons. It needs a tax invoice, or a delivery challan where the rules allow it, plus an e-way bill and GST. The rule this site uses is in the box below.

Step-by-step: when a query or verification report arrives

1. Read what is being alleged. It could be a request for documents, a verification report that says "not found", a show cause notice in Form REG-17, or a suspension intimation. Each has a different reply route and time limit, which is stated on the notice.
2. Get the marketplace's support. Ask your marketplace account manager or seller support for these, and keep the emails:
   • a consent or no-objection letter for the fulfilment centre address;
   • the agreement or programme terms under which your stock is stored there;
   • confirmation that your goods were held there on the dates in question.
3. Prove that business is carried on there. Gather, for that address:
   • the stock-transfer invoices and e-way bills sending goods there;
   • the marketplace's inventory report showing stock held there;
   • sales invoices dispatched from there.
4. Fix the registration if it is out of date. File an amendment (REG-14) to add missing warehouses and remove closed ones, with the marketplace's consent letter as proof of address.
5. Reply in the right form. A reply to a cancellation show cause notice goes in REG-18. Attach the documents, and ask for the suspension to be revoked if it has been imposed.
6. Follow the outcome. If the officer drops the proceedings, keep the order. If the registration is cancelled, the CGST Act provides for revocation of cancellation and for appeal. Both have strict time limits from the order date.

Documents to gather

• The registration certificate, showing every place of business, and the REG-14 amendment history.
• A consent or no-objection letter from the marketplace for each fulfilment centre, plus the storage agreement or programme terms.
• Stock-transfer invoices, delivery challans and e-way bills for goods sent to each centre.
• The marketplace's inventory and dispatch reports, by fulfilment centre.
• Books of account and stock records maintained for each place, as section 35 requires.

How to word the reply

The premises at [address] are a fulfilment centre operated by [marketplace], where our goods are stored and dispatched under its [programme name]. The address is declared as an additional place of business on our registration (amendment dated [date]). The marketplace's consent letter, our stock-transfer invoices and e-way bills to this centre, and its inventory report showing our stock on [date] are attached. Business is carried on from this place through the marketplace's operations. We request that the verification report be reconsidered and the proceedings dropped.

Common mistakes

• Keeping stock in a state without a GSTIN there. Selling from a warehouse in another state under your home-state GSTIN is not a fix. It is a registration default, with tax, interest and penalty risk.
• Not updating the registration when the marketplace changes its warehouses. Check the marketplace's list of centres every quarter.
• Not raising tax invoices for stock transfers between your own GSTINs. These are supplies. The receiving GSTIN may also need the input tax credit.
• Ignoring a suspension. While registration is suspended you cannot make taxable supplies under it, and marketplaces may suspend your listings in that state.

Preventing it next time

• Keep a warehouse register. List each marketplace fulfilment centre with its address, the GSTIN it falls under, and the date it was added to your registration.
• Ask for consent letters as soon as stock goes in. Ask the marketplace when you first send stock to a new centre, not when an officer asks.
• Reconcile stock each month for every centre, and keep the marketplace's inventory report for that month on file.
• Track registration amendments and returns for every GSTIN in one compliance calendar.

When to take professional help

Get help once a registration is suspended or a cancellation notice is issued. Get help too when an officer questions ITC or turnover across several warehouse states.

Cancellation affects your marketplace listings, your buyers' input tax credit and your e-way bills. A quick, complete reply is far cheaper than a revocation application or an appeal.