GST and Tax Registration for a Newly Incorporated Foreign Subsidiary in India: What Steps Come Next?

Foreign ownership does not by itself make the Indian subsidiary a “non-resident taxable person” for GST. An Indian-incorporated private limited company generally follows the ordinary Indian-company GST registration process and is treated as a domestic company for Indian corporate income-tax purposes.

The practical post-incorporation sequence is therefore:

verify PAN/TAN → activate the income-tax e-filing account → determine GST liability → obtain/verify GSTIN → add the company bank account → configure TDS and cross-border tax processes → assess transfer-pricing and annual filing obligations.

Quick Checklist: Which Tax Registrations Does a Foreign Subsidiary Need?

Registration / setup

Usually required?

When

PAN

Yes

Normally allotted through SPICe+

TAN

Yes where tax withholding applies; normally allotted at incorporation

Normally allotted through SPICe+

Income-tax e-Filing account

Yes

Soon after incorporation

GSTIN

Depends on turnover/activity; may also be voluntary

Before/within statutory registration deadline

GST bank details

Required after GST registration

Within Rule 10A deadline

State professional tax

Depends on state/employees

State-specific

Transfer-pricing setup

Usually relevant if dealing with foreign parent/group

Before related-party transactions are booked

Import Export Code (IEC)

If importing/exporting goods and in other applicable cases

Before relevant customs/import-export activity

FC-GPR / FLA

Often applicable to foreign investment, but not tax registrations

FEMA compliance

The most common mistake is assuming:

“The company is incorporated, therefore all tax registrations are complete.”

They are not.

PAN and TAN are normally integrated into the SPICe+ incorporation process.

MCA's incorporation guidance states that, after approval of SPICe+, the Certificate of Incorporation contains the PAN allotted by the Income Tax Department, and an email containing the Certificate of Incorporation together with PAN and TAN details is sent to the applicant.

This means a newly incorporated subsidiary should first collect and verify:

• Certificate of Incorporation;

• CIN;

• PAN;

• TAN;

• Memorandum and Articles;

• registered-office details;

• incorporation email;

• directors' DINs and DSCs; and

• bank-account application details.

What should you check immediately?

The company's legal name should match across:

Certificate of Incorporation → PAN → TAN → bank account → GST application → invoices → contracts.

Even small spelling or address discrepancies can cause difficulties with bank KYC, GST validation or portal registration.

Was GST Also Applied for Through SPICe+?

Possibly.

MCA's AGILE-PRO-S (INC-35) allows a company being incorporated through SPICe+ to apply for several linked registrations and services, including GSTIN and bank-account opening.

Therefore, before submitting a new GST application, check whether:

• GST registration was selected during incorporation;

• an ARN was generated;

• GSTIN has already been issued; or

• clarification/document verification is still pending.

Do not file a duplicate GST registration merely because your incorporation consultant has not yet forwarded the certificate.

Receiving PAN is not the same as setting up the company's e-filing account.

The Income Tax Department requires a company to register on the e-Filing Portal before it can use services such as income-tax return filing, tax-related filings, refund tracking and other portal functions.

The Department identifies the key prerequisites as:

• valid and active company PAN;

• PAN of the company's Principal Contact registered on the e-Filing Portal; and

• registered DSC of the Principal Contact.

Who should be the Principal Contact?

The Income Tax Department describes the Principal Contact as the individual who represents the company and has signing authority/capacity to bind it. That person receives important tax communications and notices for the company.

For a foreign-owned subsidiary, decide this deliberately.

Do not leave the account permanently controlled by:

• an incorporation consultant;

• former employee;

• temporary nominee director; or

• external accountant whose engagement later ends.

The company should retain institutional control over its tax login, registered email and DSC arrangements.

Which Income-tax Act Applies in 2026?

For Tax Year 2026–27 onward, the Income-tax Act, 2025 applies.

The Income Tax Department confirms that the new Act applies to tax payments and compliance for Tax Year 2026–27 onward.

For a business established partway through a year, its first tax year can be shorter than twelve months. The Department gives the example that where a business is set up during a financial year, the tax year begins from the date of setup and ends on 31 March.

Example

Indian subsidiary incorporated: 1 November 2026

First tax year:

1 November 2026 to 31 March 2027

The company does not wait until it has operated for a complete twelve-month period before entering the tax system.

Is a Foreign-Owned Indian Subsidiary Taxed as a Foreign Company?

No merely because its shareholder is overseas. An Indian-incorporated subsidiary falls within India's domestic-company framework.

This distinction matters because a foreign company's Indian branch and an Indian subsidiary are taxed under different frameworks.

The Income-tax Act, 2025 contains separate regimes for domestic companies and foreign companies. Section 200, for example, provides an optional 22% domestic-company regime, subject to its statutory conditions and restrictions.

That does not mean every new foreign subsidiary should automatically opt for that regime.

The company should model:

• ordinary corporate tax rates;

• available deductions;

• brought-forward losses;

• depreciation;

• incentives;

• surcharge and cess;

• transfer pricing; and

• the effect of making an irrevocable or restricted tax-regime election.

Tax regime selection is a separate decision from obtaining PAN.

A newly incorporated company normally receives TAN through SPICe+, but it still needs operational processes for deducting and depositing tax.

The company may have withholding obligations when making payments such as:

• salaries;

• rent;

• contractor payments;

• professional fees;

• interest;

• commissions;

• royalties;

• technical/service fees; and

• certain payments to its foreign parent or other non-residents.

For Tax Year 2026–27 onward, the Income Tax Department's e-payment system uses the Income-tax Act, 2025 framework for TDS/TCS payments.

Foreign subsidiaries should be particularly careful with cross-border payments

For example, the Indian company may pay its overseas parent for:

• software licences;

• trademarks;

• management services;

• technical support;

• seconded staff;

• interest;

• cloud services; or

• group cost allocations.

Before the first remittance, determine:

• whether Indian withholding tax applies;

• the domestic-law rate;

• whether a tax treaty provides a different result;

• whether transfer-pricing rules apply; and

• whether remittance reporting/documentation is required.

Do not first pay the foreign parent and ask the tax team how the payment should have been characterised afterwards.

Foreign ownership does not itself trigger GST registration. The Indian subsidiary must apply the ordinary GST turnover and compulsory-registration rules to its actual business.

For supplies of services or mixed supplies, the standard registration threshold is generally ₹20 lakh, with a ₹10 lakh threshold in specified states.

For businesses engaged exclusively in supplying goods, the threshold is generally ₹40 lakh, but is ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand.

GST registration threshold at a glance

Nature of business

General threshold

Lower-threshold locations

Services / mixed supplies

₹20 lakh

₹10 lakh in specified special-category states

Exclusive supply of goods

₹40 lakh in most states

₹20 lakh in specified states/UTs

The relevant concept is aggregate turnover under the GST framework, not merely revenue from one office or customer.

Does a Newly Incorporated Company Need to Wait Until It Crosses the Threshold?

Not always.

Section 24 of the CGST Act creates categories of compulsory registration that can override the normal turnover exemption. The Act includes, among others, specified persons making inter-State taxable supplies, persons liable under reverse charge, specified agents, Input Service Distributors and certain e-commerce businesses.

However, notifications create important exemptions from some compulsory-registration rules.

For example, CBIC confirms that eligible suppliers of inter-State services can remain outside registration while below the applicable threshold, and similar threshold relief exists for qualifying service suppliers operating through e-commerce platforms.

Accordingly:

Do not decide GST registration simply by reading Section 24 in isolation.

Check both the Act and the applicable exemption notifications.

Why Reverse-Charge GST Is Especially Important for Foreign Subsidiaries

A newly incorporated foreign subsidiary may become subject to GST earlier than expected because it purchases services from its overseas parent or group companies.

CBIC confirms that a person required to pay GST under the reverse-charge mechanism must obtain compulsory registration and cannot rely on the ordinary turnover threshold.

Imported services can attract IGST under reverse charge where the relevant conditions are satisfied, including services supplied from outside India to a recipient located in India. Notification No. 10/2017-Integrated Tax (Rate) prescribes categories for which the recipient pays IGST under reverse charge.

Example

Indian Subsidiary receives monthly management support from Foreign Parent.

Foreign Parent invoices:

USD 10,000 per month

Even though the Indian subsidiary has not yet generated substantial customer revenue, the imported-service/reverse-charge analysis may independently affect GST registration and payment obligations.

This should be checked before the first intercompany invoice is booked.

What About Free Services From the Foreign Parent?

Related-party transactions require special attention.

GST law can treat certain supplies between related persons as taxable supplies even where no normal commercial consideration is charged.

CBIC specifically notes that imported services received in the course or furtherance of business from a related person outside India may constitute a supply even where there is no consideration.

That makes arrangements such as these potentially relevant:

• parent employees supporting the subsidiary without recharge;

• free access to software or technology;

• global management support;

• shared HR/accounting systems;

• group marketing support.

A company should therefore establish its intercompany service and GST policy at the beginning, rather than assuming that “no invoice” means “no GST issue”.

Should an Export-Oriented Subsidiary Register for GST Voluntarily?

Often it deserves consideration.

A software, consulting or technology subsidiary may primarily export services to its parent or foreign customers.

Even where turnover is initially below a compulsory-registration threshold, voluntary GST registration can sometimes be commercially useful because it may enable the business to operate within the GST credit/refund framework and handle zero-rated exports in the prescribed manner.

But voluntary registration also creates ongoing obligations, including:

• invoicing rules;

• GST returns;

• reconciliations;

• record-keeping; and

• possible refund compliance.

Do not obtain GSTIN merely because “every company should have GST”.

Determine whether the benefit justifies the compliance burden.

If GSTIN was not obtained through AGILE-PRO-S at incorporation, a normal Indian private company generally applies through FORM GST REG-01 on the GST Portal.

The GST Portal's current registration process requires Part A information including:

• state/UT;

• legal name as per PAN;

• PAN;

• email address; and

• mobile number of the Primary Authorised Signatory.

Part B then includes information relating to:

• business details;

• promoters/directors;

• authorised signatories;

• authorised representative;

• principal place of business;

• additional places;

• goods and services;

• state-specific details;

• authentication; and

• verification.

What Documents Does a Foreign-Owned Subsidiary Need for GST Registration?

The company's foreign ownership does not remove the ordinary documentary requirements.

A typical file should include:

Company documents

• Certificate of Incorporation;

• PAN;

• constitutional details where required;

• directors' details.

Authorised-signatory documents

• board resolution or letter of authorisation;

• photograph;

• PAN/passport information as applicable;

• DSC.

Principal-place-of-business documents

• lease/rent agreement, if rented;

• owner's consent/NOC where applicable;

• utility bill;

• property tax receipt or other accepted ownership/address document.

The GST Portal's official checklist recognises documents such as board resolutions/letters of authorisation and rent/lease agreements, electricity bills, consent letters and property-related documents as relevant registration evidence.

Does a Foreign Director Need Aadhaar for GST Registration?

A foreign director's lack of Aadhaar does not mean the Indian company cannot obtain GST registration, but the authentication path requires planning.

The GST Portal distinguishes between company directors and authorised signatories and presently provides an Aadhaar/authentication workflow for registration applications. For a private company, the portal identifies the Primary Authorised Signatory and one director within the authentication framework. It also separately allows non-Indian stakeholders to provide passport information.

Current registration processing also uses risk-based OTP/biometric and document-verification mechanisms. Depending on the persons selected and their identification status, additional verification may be required.

Practical point

If every director is overseas, resolve early:

• who will be the Primary Authorised Signatory;

• which DSC will be used;

• whether Aadhaar authentication is available;

• whether biometric/document verification will be required; and

• who can respond quickly to GST officer queries.

Companies are required to use a DSC for relevant GST registration submissions.

Section 25 of the CGST Act provides that a person liable under Sections 22 or 24 must apply for registration in each State or Union Territory where it is so liable within 30 days from the date liability arises.

The effective date can depend on whether the application was made within that period.

This matters for companies that:

• begin billing before registration;

• suddenly receive a reverse-charge service;

• cross the turnover threshold;

• open operations in another state; or

• change their business model.

Do not wait until year-end for the statutory auditor to identify that registration should have occurred six months earlier.

Receiving GSTIN does not complete the registration setup.

Under the amended Rule 10A of the CGST Rules, bank-account details must be furnished:

within 30 days from grant of registration, or before filing GSTR-1 / using the Invoice Furnishing Facility, whichever is earlier.

The GST Portal currently permits bank details to be added through a non-core amendment after registration.

Failure to comply can lead to system warnings and potentially suspension/cancellation proceedings. The GST registration framework was specifically amended to address Rule 10A non-compliance.

Important practical point

The GST bank account should be:

• in the company's name;

• connected with the company's PAN; and

• correctly validated on the portal.

Do not use the foreign parent's account or a founder's personal account.

GST registration is state-specific, whereas PAN and TAN are company-level identifiers.

Section 25 requires registration in every State or Union Territory in which the company is liable to be registered.

Example

A foreign-owned company has:

• headquarters in Bengaluru;

• warehouse supplying goods from Maharashtra; and

• another taxable establishment in Haryana.

Depending on the supply and establishment facts, separate GST registrations may be required.

Do not assume that the Bengaluru GSTIN covers every Indian state simply because all branches use the same PAN.

Conversely, having an employee or customer in another state does not automatically mean a separate GST registration is required.

The company needs to determine from where the taxable supply is actually made and whether it has an establishment requiring registration in that state.

Most wholly owned foreign subsidiaries will transact with their overseas parent, so transfer pricing should be addressed before the first year-end.

Common international transactions include:

• management services;

• software licences;

• royalties;

• purchase/sale of goods;

• contract R&D;

• IT support;

• loans;

• guarantees;

• reimbursements;

• employee secondments; and

• cost-sharing arrangements.

Under the Income-tax Act, 2025, international and specified domestic transactions are subject to India's transfer-pricing framework.

There is also an important 2026 form-number change.

Many older articles still say:

“File Form 3CEB.”

Under the Income-tax Rules, 2026, the corresponding report for Tax Year 2026–27 onward is now Form No. 48, furnished under Section 172 of the Income-tax Act, 2025. The Income Tax Department expressly maps old Form 3CEB to new Form 48.

Form 48 must be filed annually where the taxpayer has entered into qualifying international and/or specified domestic transactions and is due one month before the applicable income-tax return due date.

This is particularly relevant for a foreign-owned subsidiary because its first accounting year often contains related-party transactions even before it earns significant third-party revenue.

Every company is required to file an income-tax return even if it reports a loss or little operating income.

Section 263 of the Income-tax Act, 2025 specifically requires companies to furnish returns and states that specified entities including companies must file regardless of income or loss.

For Tax Year 2026–27, the statutory due-date framework provides:

Company situation

Income-tax return due date

Company not subject to Section 172 transfer-pricing report

31 October following the tax year

Taxpayer subject to Section 172 reporting

30 November following the tax year

Example

Company incorporated: 1 October 2026

First tax year ends: 31 March 2027

If Section 172 does not apply:

Return due: 31 October 2027

If Section 172 international-transaction reporting applies:

Return due: 30 November 2027, with the Form 48 timetable correspondingly earlier.

Always check subsequent Finance Act amendments before applying a future filing date.

A newly incorporated foreign subsidiary should separately examine registrations that depend on its activities.

Professional tax

Professional-tax registration is state-specific. Depending on the state and employee setup, both employer and employee-related obligations may arise.

MCA's AGILE-PRO-S framework integrates certain professional-tax registrations with incorporation in specified states, but companies should check the requirements in every state where employees are located.

IEC

A company importing or exporting goods will usually need to assess Import Export Code requirements under the DGFT framework.

IEC is not the same thing as GSTIN.

Customs registrations

Importers/exporters may need customs-system and bank/port registrations in addition to IEC and GST.

State business registrations

Shops and establishments, factory, pollution-control and other registrations depend on the type and location of business.

None of these should be confused with PAN or GST registration.

Generally, no.

The company normally opens its bank account through/post incorporation, while GST registration can depend on liability or voluntary choice.

Indeed, Rule 10A specifically contemplates providing GST bank-account details after GST registration is granted.

For practical implementation, the sequence is often:

incorporation → PAN/TAN → company bank account → subscription capital → GSTIN → GST bank validation

although GST registration may have been initiated through AGILE-PRO-S as part of incorporation.

That depends on whether it is already legally required to register.

If the company is below the threshold and no compulsory-registration trigger applies, it may operate as an unregistered supplier for GST purposes, subject to the applicable law.

But if the company has already become liable to registration, continuing to issue invoices without correctly addressing GST can create tax, interest, invoicing and input-credit issues.

Before the first customer invoice, determine:

• whether the supply is taxable;

• place of supply;

• applicable GST rate;

• whether registration is mandatory;

• whether the transaction is inter-State or intra-State;

• whether reverse charge applies; and

• whether the customer expects a GST-compliant tax invoice.

1. Applying for PAN again

SPICe+ normally already generated PAN.

2. Assuming TAN means TDS compliance is automatic

TAN is only the identifier. The company still has to deduct, deposit and report tax correctly.

3. Registering for GST simply because the company is foreign-owned

Ownership does not create GST liability by itself.

4. Waiting for turnover to rise while ignoring reverse charge

Imported services from the foreign parent can independently create a GST issue.

5. Treating the subsidiary as a foreign company for corporate tax

An Indian-incorporated subsidiary operates within the domestic-company tax framework.

6. Forgetting Rule 10A

GST bank details must be furnished within the prescribed 30-day / GSTR-1 timeline.

7. Using only one GSTIN for genuinely multi-state operations

GST liability must be assessed state by state.

8. Ignoring transfer pricing during the first year

Intercompany expenses often begin before external sales.

9. Using old tax terminology after April 2026

The Income-tax Act, 2025 applies to Tax Year 2026–27 onward, and certain forms/numbers have changed—including the new Form 48 replacing Form 3CEB for current-law international-transaction reporting.

10. Keeping portal credentials with outside consultants

The company should control its GST, income-tax, banking and MCA credentials institutionally.

Immediately after incorporation, the finance/legal team should confirm:

• PAN and TAN have been received and match the company name.

• Company e-Filing account has been created.

• Principal Contact and DSC are functioning.

• TAN/TDS process is configured before payroll/vendor payments.

• GST liability analysis has been completed.

• Any GST application filed through AGILE-PRO-S has been checked.

• Required REG-01 filing has been made if GST applies.

• Company bank account is active.

• GST bank details are added within Rule 10A deadlines.

• Intercompany transactions with the foreign parent are documented.

• Reverse-charge GST has been analysed.

• Transfer-pricing documentation responsibilities are assigned.

• State professional-tax/other registrations have been checked.

• The first tax-year and income-tax filing calendar has been recorded.

• FEMA reporting is separately tracked by the finance/company-secretarial team.

The objective should be to establish the compliance system before the first employee salary, customer invoice or foreign-parent recharge.

Does a foreign-owned Indian subsidiary automatically receive PAN?

Yes. For companies incorporated through SPICe+, PAN is integrated into the incorporation process, and MCA states that the PAN appears on the Certificate of Incorporation.

Does the company also receive TAN automatically?

MCA states that PAN and TAN details are communicated following SPICe+ approval. A separate TAN application should therefore not ordinarily be necessary for a newly incorporated SPICe+ company.

Is GST registration compulsory for every foreign-owned subsidiary?

No. Foreign ownership alone does not trigger GST registration. Registration depends on the ordinary GST turnover thresholds and compulsory-registration provisions applicable to the company's activities.

What is the GST registration threshold for services?

The normal threshold is generally ₹20 lakh, with ₹10 lakh applying in specified special-category states.

What is the GST threshold for a company supplying only goods?

The threshold is generally ₹40 lakh in most states, with a ₹20 lakh threshold applying in specified states and Puducherry.

Can a foreign subsidiary voluntarily register for GST?

Yes. Section 25 permits voluntary registration even where a person is not otherwise liable, after which the GST provisions applicable to a registered person apply.

Does importing services from the foreign parent create GST liability?

Potentially yes. Imported services can attract IGST under reverse charge, and persons liable to pay tax under reverse charge fall within compulsory-registration rules. The exact result depends on the service and place-of-supply rules.

When must GST bank details be added?

Current Rule 10A requires them within 30 days from grant of registration or before filing GSTR-1/IFF, whichever is earlier.

Does a foreign-owned subsidiary pay foreign-company income-tax rates?

Not simply because its shareholder is foreign. An Indian-incorporated company falls within the domestic-company tax framework.

Is Form 3CEB still the current transfer-pricing form in 2026?

For the Income-tax Act, 2025 / Rules, 2026 framework, the old Form 3CEB corresponds to Form No. 48, which is the current report under Section 172 for international and/or specified domestic transactions.