Registration under GST helps in identifying taxpayers who are liable to pay taxes and comply with the provisions under the GST law. Thus, GST registration means availing a GST Identification Number that helps taxpayers in meeting their tax liability and claiming input tax credit under GST. This implies that only a registered person under GST is eligible to collect taxes from his customers. Furthermore, he can claim the credit for the tax paid on the inputs used in such supplies.
Now, the GST law provides for certain turnover limits as a criteria for registration under GST. However, there are certain category of persons who are compulsorily required to register under GST irrespective of their annual turnover.
Compulsory Registration Under GST
Section 24 of the CGST Act, 2017 lists those categories. Accordingly:
- Persons making inter-state taxable supply.
- Casual taxable persons
- Persons required to pay tax under reverse charge
- Persons required to pay tax under sub-section (5) of section 9
- Non-resident taxable persons
- Persons who are required to pay Tax Deducted at Source (TDS) under section 51. This is immaterial of the fact that whether they are separately registered under the Act or not.
- Persons making taxable supply of goods or services on behalf of other taxable persons as an agent or otherwise.
- Input Service Distributor, whether separately registered under the Act or not
- Persons supplying goods or services other than supplies specified under sub-section (5) of section 9. Such supplies are made through an electronic commerce operator who is required to collect tax at source under section 52.
- Every electronic commerce operator
- Persons supplying online information and database access or retrieval services from a place outside India. Such services are supplied to a person other than a registered person in India.
- Any other person notified by the government on the recommendations of the Council.
In this article, we will talk about the provisions with regards to a Non-Resident Taxable Person under GST. So let’s understand who is a Non-Resident Taxable Person under GST, the registration process, the returns and the refund of tax with regards to such a person.
Who is a Non – Resident Taxable Person?
A Non – Resident Taxable Person means a person who supplies goods or services occasionally. This person does not have a fixed place of business or residence in India. Moreover, he can supply goods or services either as a principal or an agent or in any other capacity.
Furthermore, a Non – Resident Taxable Person has to get himself registered necessarily in order to make a taxable supply in India. Thus, he needs to apply for registration at least five days prior to commencing his business in India in Form GST REG 09. This application needs to be filed electronically along with a self attested copy of his valid passport. Such a person need not have a PAN in India.
Registration of a Non-Resident Taxable Person
As per the decisions taken in the 32nd GST Council Meeting, a normal person is required to register under GST if his annual turnover in the preceding financial year or the current financial year exceeds Rs 40 Lakhs. This is in case the person is engaged in the supply of goods. Likewise, a supplier of goods in special category states is required to register under GST if his annual turnover in the preceding or current financial year exceeds Rs 20 Lakhs.
However, the supplier of services needs to register under GST if his annual turnover in preceding or current financial year exceeds Rs 20 Lakhs.
But, as mentioned above, there are certain category of persons who are obligated to register under GST irrespective of their annual turnovers. This means the annual turnover threshold for GST does not apply to such persons.
Things To Remember for Registration of Non-Resident Taxable Person
Non-Resident Taxable Persons is one of such categories of persons who need to mandatorily get registered under GST. Such a person is required to apply for registration using his valid passport and is not required to have a Permanent Account Number (PAN) in India. Further, a Non-Resident Taxable Person needs to apply for such a registration at least five days before the commencement of business in India.
Also, a Non-Resident Taxable Person cannot opt for registration under the GST Composition Scheme. Additionally, any business entity incorporated outside India is also required to submit its tax identification number or a unique number along with the application for registration. This is because it is with this number with the help of which the government of that particular foreign country would identify such an entity. Also, such an entity can also provide PAN if available.
Lastly, a Non-Resident Taxable person is obligated to pay advance tax. Such an advance tax is equal to his approximate tax liability for a period for which such a registration has been availed by him under GST.
Process of Registration For A Non-Resident Taxable Person
1. Application For Registration in Form GST REG-09
Unlike a normal taxable person, a Non-Resident Taxable Person does not apply for registration in GST REG-01. In fact, a simplified Form GST REG-09 is required to be filed by such a person in order to apply for GST registration.
Further, the Non-Resident Taxable Person is required to submit an attested copy of his valid passport along with the application electronically. Such an application needs to be duly signed and verified through electronic verification code.
As mentioned above, there can be a circumstance where a Non-Resident Taxable Person is an entity registered outside India. In such a case, the business entity is required to submit its Tax Identification Number or Unique Number along with the application for registration. It is with this number that the government of the foreign country would identify such an entity.
Also, the entity of the Non-Taxable Person can provide its PAN if available.
2. Signature of Authorized Signatory on the Application
This application for registration by a Non-Resident Taxable Person is required to be signed by an authorized signatory. Authorized signatory is a person who is a resident of India having a valid PAN number.
3. Generation of Temporary Reference Number (TRN)
TRN is generated via the common portal once the PAN, mobile number and the email address of the person applying for registration as a Non-Resident Taxable Person gets verified.
4. Depositing Advance Tax
The Non-Resident Taxable Person is now required to deposit the mandatory advance tax using the TRN provided via the common portal. The tax amount such deposited equals approximate tax liability for the period for which the Non-Resident Taxable Person has availed registration. This tax amount gets credited in the electronic cash ledger of the applicant.
5. Issuance of Registration Certificate
Once the payment of advance tax gets reflected in the electronic cash ledger of the Non-Resident Taxable Person, the registration certificate is issued to him electronically.
6. Validity of the Registration Certificate
A Non-Resident Taxable Person can make supplies only after the Registration Certificate is issued. Such a certificate is valid for a period as specified in the application for registration or 90 days from the date of registration, whichever is earlier.
7. Extension of the Registration Period
A Non-Resident Taxable Person can seek to extend the period of registration so specified in his application for registration. This is done by submitting an application electronically through the common portal in Form GST REG-11.
However, such an application for the extension of the registration must be made before the end of the validity of the registration provided to him. Also, the validity period of 90 days can be extended by a further period of not more than 90 days. Such an extension of the registration period is permitted only on the payment of additional advance tax. This advance tax amount equals the approximate tax liability for the period for which such an extension is seeked by the Non-Resident Taxable Person.
Returns Filed By A Non-Resident Taxable Person
A Non – Resident Taxable Person files a simplified return in form GSTR 5 for every calendar month. This return includes details pertaining to:
- inward supplies
- outward supplies
- any interest, penalty, fees
- tax payable or tax paid or
- any other amount payable under the act
Thus a Non – Resident Taxable Person is not required to file annual return. He just needs to file a monthly return in form GSTR 5. This return can be filed either electronically through a common portal or Facilitation Centre notified by the commissioner.
The details in GSTR 5 need to be filed within a time period that is earlier of:
- within 20 days after the end of the calendar month or
- within 7 days after the last date of validity of the registration
You May Also Read
Types of GST Returns: Filing and Due Dates of Returns
Refund In Case of a Non-Resident Taxable Person
A Non-Resident Taxable Person is entitled to receive any balance advance tax paid by him after his tax liability is adjusted. However, this balance amount of advance tax gets refunded only if the Non-Resident Taxable Person has filed all tax returns for the period for which the registration was availed by such a person.
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GST Refund Process: How To Claim GST Refund?
Thus, to help you understand who is a non-resident taxable person, here is an easy to understand infographic on non-resident taxable person under GST.