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When are you Considered a Non-Resident Taxable Person under GST Law?

Do you come to India occasionally and conduct business without any fixed place? Or are you managing a business as an agent on behalf of a non-resident person? If your answer is yes, then this article is for you.

Even if you are a non-resident keen on starting a business in India, keep reading to understand the implications of GST. 

What’s the definition of Non-Resident Taxable Person under GST? 

As per section 2(77) of CGST Act, 

“Non-Resident Taxable Person” means any person who occasionally undertakes transactions involving the supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

Thus, every person or business, who supplies goods or services to India, from outside India, is considered as Non-Resident Taxable Persons. 

Is it mandatory to obtain GST registration for Non-Resident Taxable Person?

Irrespective of the aggregate turnover limit, a non-resident taxable person has to obtain GST registration compulsorily. 

The non-resident taxable persons must obtain GST registration five days before the commencement of business. 

What is the procedure for applying for GST Registration?

A non-resident taxable person has to electronically submit an application duly signed or verified through EVC, along with a self-attested copy of his valid passport, in FORM GST REG-09. 

As mentioned above, this application must be submitted at least 5 days before the commencement of business. 

In case a company incorporated or established outside India is the non-resident taxable person, it has to submit a tax identification number of its original country as well. In case the tax identification number is unavailable, it has to submit any other unique number, on the basis of which, the Government of that country identifies the entity. 

The application for registration has to be signed by his authorized signatory, who’ll be an Indian resident having a valid PAN number. 

On successful verification, the non-resident taxable person will be given a temporary reference number for payment of advance tax.  

The registration certificate shall be issued only after the payment of advance tax. The non-resident taxable person can make taxable supplies after the issuance of the registration certificate. 

Find a Chartered Accountant on Wizcounsel who can assist you in getting GST registration online

What is the validity Of Registration?

The certificate of registration shall be valid for the period specified in the application for registration (maximum 90 days from the effective date of registration). 

In case the non-resident taxable person intends to extend the period, he’ll have to submit FORM GST REG-11 electronically, before the end of the validity of the registration, post which the validity can be extended maximum for another 90 days. 

When are you Considered a Non-Resident Taxable Person under GST Law?

Advance payment of Tax

A non-resident taxable person is required to make an advance deposit of tax on presumption basis for the period for which the registration is sought. The advance tax will get credited into the Electronic Cash Ledger and will get adjusted at the time of return filing against the tax liability.

If the person wishes to extend the validity, he will have to pay an additional amount of tax equivalent to the estimated tax liability for the period for which the extension is sought.

Want to get expert advice on the advance payment of tax or seeking an extension in the validity? Consult a CA and get it done hassle-free. 

GST Return

The non-resident taxable person shall furnish a return in FORM GSTR-5 electronically; containing the details of outward and inward supplies. 

He shall pay tax, interest and late fees by 20th of next month or within seven days from the last day of the validity period of registration, whichever is earlier.

File the GST return online with the help of a Chartered Accountant and get the refund of any excess tax paid earlier. 

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