<p style="text-align:justify"><span style="font-size:14px"><span style="color:#34495e">Section 2(18) of the CGST Act, 2017 defines &ldquo;business vertical&rdquo; to mean &ldquo;a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals.<br />
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Explanation.&ndash;&ndash;For the purposes of this clause, factors that should be considered in determining whether goods or services are related include&ndash;&ndash;</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">(i) the nature of the goods or services;</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">(ii) the nature of the production processes;</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">(iii) the type or class of customers for the goods or services;</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">(iv) the methods used to distribute the goods or supply of services; and</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">(v) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities&rdquo;.</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">It is the choice of the taxable person to build all the services provided in one vertical or separate verticals based on their business models and requirements. They may choose to obtain separate registration as a business vertical in terms of the proviso to section 25(2) of the CGST Act, 2017.</span></span></p>