Ahmedabad: Businesses operating from co-working spaces and applying for GST registration are facing increasing scrutiny from tax authorities across the state, even though such registrations are legally permissible. Officials are reportedly cautious when multiple firms operate from the same address, often suspecting shell companies or fake entities created to evade taxes.
Documentation challenges for applicants
Applicants say government officials are frequently asking for proof of exclusive possession of office space, despite the fact that co-working arrangements generally provide licensed access to desks or cabins rather than formal leased premises. In some cases, GST applications have been rejected because another company is already registered at the same location.
Chartered accountant Karim Lakhani said documentation has become a major hurdle for applicants. "Utility bills are usually issued in the property owner's name, not the applicant's, while officers may insist on cabin-specific allotment letters in addition to lease or licence agreements. Even minor mismatches in names or addresses between PAN records and rental documents can trigger rejection," he said.
Post-registration issues
He added that post-registration challenges also remain significant. "Businesses are vulnerable to physical verification, and failure to demonstrate actual operations or maintain records at the premises can lead to cancellation. Shared mail handling in large co-working hubs may also result in missed GST notices and compliance lapses," Lakhani said.
Experts say clearer guidelines are needed, especially as a growing number of startups, consultants and small businesses now rely on flexible workspaces. Applicants have been advised to select "shared premises" in GST forms and maintain strong documentation, including a no-objection certificate, demarcated space details and recent utility bills.
Scrutiny of applications
Several recent GST applications have reportedly been placed under scrutiny after authorities found deficiencies relating to the declared principal place of business. Notices issued to applicants have questioned whether shared premises qualify as a distinct and identifiable business location under GST rules.
Officials have also pointed to rent agreements that fail to mention specific desk numbers, suite numbers or other unique identifiers, saying the absence of clear demarcation makes physical verification difficult. Applicants have been asked to provide revised rent agreements, proof of exclusive space, details on maintenance of books of accounts, compliance with display requirements, and landlord documents such as layout plans showing demarcated areas, occupant lists, GSTINs and vacant spaces.
Industry perspective
Umesh Uttamchandani, co-founder of Dev Accelerator, said co-working spaces have long faced GST registration hurdles. "However, temporary workspaces have higher possibilities of suspicious businesses and, to prevent it, certain stricter rules are required," he said.
