A person who makes the supply of goods or services in a taxable territory without having any fixed establishment in that place is known as a Casual Taxable Person or CTP. Such supply is made on an occasional basis. The person may supply goods for the furtherance of business in a principal, agent, or any other capacity. In this article, we'll know about a casual taxpayer, documents required for casual registration under GST, along with other relevant information.
Who is a casual taxable person under GST?
A casual taxable person has the following features:-
1. They make the sale of goods or services or both, occasionally;
2. The sale is for business purposes;
3. Goods or services are supplied in the capacity of a principal or agent;
4. The goods or services are supplied in a specific location where he/she only has a temporary business place.
A dealer, businessperson, service provider, etc., in one state who does occasional transactions in another state, such as supplies made at trade fairs, will be classified as a 'casual taxable person' in that other state. They will be required to register and pay tax in that capacity. For example, a jeweller with a fixed place of business in Kolkata who holds an exhibition with a sale in Chennai, where they have no fixed place of business, would be considered a 'casual taxable person' in Chennai.
Who is not a casual taxable person under GST?
The answer to this question is that if an activity is not a business, there is no question of registration and compliance as CTP. Secondly, the threshold limit of registration does not apply to a casual taxable person. Therefore, a person who engages in regular business transactions but does not exceed a certain threshold level would be required to take registration as a casual taxable person if they undertake any business activity in another state on an occasional basis.
The following points should be noted:
• Since the registration thresholds do not apply, therefore an individual with a business would need to register regardless of their turnover;
• They would be obliged to apply for registration at least 5 days before the start of the business;
• An advance deposit of the estimated tax liability is required to be provided simultaneously with the application for registration.
The registration would be valid for 90 days or the period mentioned in the application, whichever is shorter. Despite the phrasing "estimated tax liability," Circular No. 71/45/2018-GST dated October 26, 2018, clarifies that the deposit must be made of the projected "net" tax liability after subtracting the estimate of a possible input tax credit.
Also Read: A Brief Guide To Reverse Charge Under GST
Registration Process of a Casual Taxable Person
A normal taxpayer has to take registration under GST if their aggregate turnover in a particular financial year is more than Rupees 20 lakhs. There are certain categories of suppliers which require mandatory registration under GST law:
- A Casual Taxable Person is one such provider.
- They cannot opt for the Composition Scheme.
- They also must get a temporary GST registration as a casual taxable person from the state where they want to make supplies. This registration would be valid only for 90 days.
Example - Assume that Mrs Shanti has estimated her taxable services to be worth Rs. 200000. To get the registration of a casual taxable person, she must pay an advance deposit of Rs.36000 (18% of Rs.200000).
GST temporary registration for Casual Taxable Person
Applying as a casual taxable person follo ws the same steps as applying as a regular taxpayer. When you apply for registration on the GST portal (services.gst.gov.in), ordinarily, the system asks if you want to register as a casual taxpayer. To apply as a casual taxable person, click 'yes' in this tab.
Further, the application process is explained as follows:
- The application can be made for registration with Valid PAN, Aadhaar, Mobile no., and Email ID.
- First, create a temporary application reference no. with Part A of REG 1.
- After validating your credentials with OTP, go to the GST portal and complete the form.
- Now start filing Part B of REG 1.
- Under part B, details such as business name, ownership proof, address of the principal place of business, additional place of business, HSN code of goods and services, etc., have to be furnished, and valid documents have to be attached.
- After filing the form, submit your application through OTP.
- The registration certificate is issued electronically once you have made the tax deposit in the cash ledger.
- After you receive the certificate, you can start making the taxable supplies.
- The certificate granted is valid for 90 days only.
Documents required for Casual Taxable Person Registration
The paperwork/information needed for a casual GST registration is the same as for regular registration, except that there may be additional documentation needed for the place of business where the business will be conducted, as the location may be temporary in this situation.
For example, a copy of documents about the exhibition, such as documentation relating to payment for booth allocation, communication/consent letter allocating space for the exhibition on the owner's letterhead, is necessary in the case of casual registration for the exhibition purposes.
Following is the list of documents required for casual registration under GST:
- Copy of PAN Card
- Copy of Aadhaar Card
- Passport Size Photograph
- For communication and OTP reasons, please provide your phone number and email address.
- If the applicant already has a registration, show it. (For example, Goods and Services Tax Identification Number or GSTIN, Articles of Incorporation, or registration with any other authority, such as the Ministry of Corporate Affairs or MCA)
- Certificate of Incorporation of Company, Partnership Deed, Memorandum of Association or MoA, Article of Association or AoA, etc.
- PAN Card, Aadhaar card, photograph, email id, mobile no. of all the partners, directors, or proprietor.
- Bank details like a copy of the cancelled cheque or first page of the bank statement or passbook containing the name of the account holder and address
- Proof of principal place of business includes sale deed copy, municipal tax receipt, utility bill, rent deed, lease deed, etc.
- Details about the additional place of business
- HSN wise summary of five main goods provided or services rendered
- Letter of authority on the applicant's letterhead permits one or more people to sign all GST-related documents. Persons other than the permitted signatories must sign the authorisation letter. However, for a sole proprietorship, an authorisation letter is not necessary.
- If relevant, state-specific registration is required.
- Tax (challan) payment on projected supplies made during the Casual registration period.
Extending your period of registration
Before the registration's validity expires, you can apply in FORM GST REG-11. For a period of up to 90 days, an extension can be requested. Only if an additional tax liability for the extended term is deposited will the extension be granted.
Return Filing Compliances for Casual Taxable Person
A casual taxable person is mandatorily required to furnish the GST returns. Following returns have to be furnished by them:-
- Details of output supplies of goods and services- This has to be furnished in Form GSTR 1. It has to be submitted by 11th of the next month
- Summary of Input Tax Credit, inward supplies, and tax liability- This has to be furnished in Form GSTR 3B. It has to be submitted by the 20th of next month.
If a CTP has chosen the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) plan, they must file IFF/GSTR-1 and GSTR-3B every quarter.
In the same way, a registered taxpayer must file an annual return, a casual taxpayer does not need to file it.
Note: All forms must be filed through the common portal, either directly or through a Facilitation Center designated by the Commissioner.
What if the tax paid in advance falls short of actual liability?
In this instance, you must deposit the additional tax due on the supplies. If filed on the due date given under section 39 (7) of the Central Goods and Services Tax or CGST Act'2017, there will be no interest in the increased tax liability.
Refund for Casual Taxable Person
- After all of the returns have been filed, the excess tax paid in advance can be returned when filing for the surrender of registration.
- CTP is eligible for a refund of any amount placed in excess of tax liability, which will be refunded once all required returns for the Registration period have been submitted.
- Form GST RFD-01, under the category "Refund of excess balance in the electronic cash ledger," can be used to request a refund of the amount in excess of tax liability in the electronic cash ledger.
Also Read: GST Rates in India – List of Goods and Service Tax Rates, Slab
Conclusion
A person may engage in any GST-taxable business activity that is temporary or occasional and will last for a short period in a state where the person does not have their usual place of business. In that case, they must register as a casual taxable person in that state to conduct transactions. Participation in an exposition in another state is an example of a casual registration. When a taxable person attends an exposition outside of their customary state of registration, they must register as a casual taxable person to sell and buy items in that state. Therefore, we hope that this article has explained the meaning of the casual taxable person and other formalities like return filing, registration, refund, etc.
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